AUD Firms on Strong Q2 GDP Amid USD Strength
Australia's second-quarter GDP growth of 0.4% quarter-on-quarter outpaced expectations, supporting the Australian Dollar (AUD) against the US Dollar (USD). The Q2 figure also accelerated from the 0.3% rise in Q1.
On an annual basis, GDP grew 2.1%, slowing from 2.5% in the first quarter but still ahead of the market expectation of 1.8%. Despite this domestic support, upside for AUD/USD may remain limited due to rising US Treasury yields and higher crude prices that have revived inflation concerns.
The US 10-year Treasury yield climbed to 4.80%, its highest level since early 2025, driving demand for the USD and fueling interest rate hike worries. Crude oil prices also advanced amid escalating tensions between the United States (US) and Iran, intensifying fears of potential energy disruptions.
Recent US data showed mixed signals, with July JOLTS job openings rising to 7.27 million but falling short of market expectations, while the ISM Manufacturing PMI slipped to 54.6 in August from 55.6 previously.