AUD/USD falls despite strong GDP
AUD/USD has extended its pullback from last week’s 15-week high of 0.7207 as risk-aversion flows into the US dollar outweigh this morning’s resilient second quarter (Q2) gross domestic product (GDP) report.
The report showed Australian GDP increased by 0.4% in Q2 2026, modestly stronger than the 0.3% print recorded in the prior quarter. This saw the annual rate of growth rise to 2.1% year-on-year (YoY), easing from 2.5% in the prior quarter, but comfortably above the 1.8% expected. It was the Australian economy’s 19th consecutive quarter without a contraction.
Grace Kim, Australian Bureau of Statistics (ABS) head of National Accounts, said: ‘Economic growth remained subdued in the June quarter as households continued to behave cautiously. While increased spending and business investment occurred in pockets of the economy, imports supported much of the growth, moderating its contribution to overall GDP growth.’
The main driver of the increase was households. Household spending rose 0.4% and contributed 0.2 percentage points (ppt) to GDP, with vehicle purchases doing much of the heavy lifting as households continue to transition to electric vehicles (EVs).
