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AUD slips on weaker GDP, Bitcoin breaks $12,000

Summary:

  • Australian GDP missed forecasts in the third quarter but improved markedly either way
  • JPY and NZD lead the gains in G10 while AUD loses the most
  • Bitcoin (BTCUSD on xStation5) has already topped $12,000 for the first time
  • Asia stock markets have plunged except the Australian index (AUS200)

Beginning with the FX market one may notice that the Japanese yen and the NZ dollar are among the best performing currencies at the time of writing. The former is being pushed higher on the back of a slump seen in the NIKKEI (JAP225) while the latter is gaining the ground following the upbeat milk auction and yesterday’s remarks voiced by RBNZ governor Spencer. On the other hand, the Australian dollar is trading decisively lower as GDP missed the estimate in the past quarter, it registered a significant improvement compared to the prior quarter though.

link do file download linkAustralian GDP fell short of the median estimate in Q3 but it saw a substantial increase anyway. Source: Macrobond, XTB Research

Let’s pin down that Australia’s GDP came in at 0.6% qoq and 2.8% yoy in the third quarter against the forecasts at 0.7% qoq and 3% yoy respectively. While on the surface it could be a slight disappointment overall an acceleration of growth could be welcomed by the RBA. Notice that growth was underpinned mainly by business investment and public infrastructure whereas public investment actually declined in a quarterly basis during Q3 chiefly due to a payback effect after a huge boost in the June quarter. By and large GFCF added as much as 1.47% to growth which was the largest contribution since the last quarter of 2012. Finally it’s worth mentioning a 1.2% increase in the compensation of employees, however it was sparked predominantly because of more people in jobs rather than how much each one is being paid for their job.

link do file download linkThe AUDUSD is retreating from its local highs made during the yesterday’s session. Nevertheless, assuming a possible comeback of the greenback ahead of the FED meeting and the US tax bill one may second-guess that the pair could be sliding in the weeks to come. From a technical point of view, as long as the price moves below an upper boundary of a descending channel, a further drop seems to be a base scenario. Source: xStation5

Volatility has been seen on Bitcoin as well as the most famous virtual currency has already managed to top $12,000 for the first time ever. The ongoing increase is being fueled by expectations that a launch of Bitcoin futures could encourage more hedge funds and other institutional investors to bet on the Bitcoin price which in turn would shore up the digital currency. Do notice that an acceleration of a rise came on the heels of a breakout of $11,850.

link do file download linkBitcoin (BTCUSD) has sped up its gain after the price broke a resistance placed at $11,850. Source: xStation5

At last the Asian stock markets have seen hefty declines across the board which have been the most impressive in case of the NIKKEI (JAP225) and the Hang Seng (CHNComp) as they’ve shrunk 2% and 1.8% respectively. On top of that, the Shanghai Composite has slid 0.55% while the Australian S&P/ASX has been the least afflicted as it’s slumped a touch more than 0.4%. Notice that a relative better outcome seen in the Australian index could have been the ramification of relatively strong GDP growth for the third quarter.

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