AUD: Pressurized by the dismal Q3 GDP numbers - SocGen

Kit Juckes, Research Analyst at Societe Generale, notes that the biggest overnight mover is the Australian dollar, suffering from the release of weak Q3 GDP data on a day when there’s little other news.

Key Quotes

“GDP fell 0.5%on the quarter; just the fifth quarterly fall in this millennium. That took the year-over-year growth rate down to 1.5%, the slowest since 2009, all in all enough to weaken the currency by 0.4%. I’d love to have the confidence to extrapolate the start of a new downtrend for the AUD, but I’m not sure there’s much more than noise to see here, sadly. A significant move down requires worse news out of China or a turn lower in commodity prices, neither of which is really on the cards.”

“Over 2017 as a whole, we like longs in both NOK and SEK against AUD and NZD, but that’s a trade more likely to work in Q2-Q4 than right now. We will go long AUD/NZD again however, if this dips back below 1.04.”