AUD/USD Tumbles as Australia GDP Surprises, Geopolitics Weighs
The AUD/USD pair dropped to its lowest level in weeks as Australia's GDP growth beat estimates, but geopolitical tensions and rising crude oil prices weighed on the currency.
Australia's economy grew by 0.4% in the second quarter, exceeding expectations of a 0.3% increase, with an annual growth rate of 2.1%, higher than forecasted at 1.8%. The strong GDP numbers may prompt another interest rate hike from the Reserve Bank of Australia (RBA), but bond yields have surged to their highest levels in years, with the 30-year yield reaching 5.72% and the ten-year yield hitting 5.22%.
The AUD/USD pair's decline was also influenced by rising crude oil prices due to intensified US-Iran tensions, with Brent crude at $95 and West Texas Intermediate (WTI) at $90.75. Meanwhile, the US bond market is experiencing a crisis, with debt reaching $40.1 trillion and economic growth slowing.
The next key event for the pair will be the upcoming ADP jobs report, which is expected to show that the private sector added 48k jobs. The AUD/USD's technical analysis suggests it may break below its ascending channel, potentially reaching the psychological level of 0.7050.