Aussie Dollar Shrugs Off Worse-Than-Expected Construction Data
- Australian Dollar little changed after worse than expected construction data crossed the wires
- In the last quarter of 2016, total building construction fell 0.2% q/q vs 0.5% gain expected
- Private dwelling creation was valued at A$8.23 billion versus A$8.16 billion in the third quarter
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The Australian Dollar shrugged off total construction work data which failed to live up to economists’ expectations. The amount of work done fell 0.2 percent q/q in the fourth quarter of 2016. Economists expected a 0.5 percent gain ahead of the release. While disappointing relative to forecasts, this was a slower decline than the 4.4% contraction in the third quarter (revised upward from -4.9% originally reported).
Not only is the data a component of Australia’s GDP, but the Reserve Bank of Australia is also closely monitoring housing market conditions and has been doing so for some time. In its most recent monetary policy announcement, the central bank reiterated that their supervisory measures have strengthened lending standards.
The RBA also expects that a considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Looking into the details of today’s construction report, new private housing creation was valued at A$8.23 billion. This is an uptick from the last reading of 8.16 billion.
Nevertheless, the central bank is unlikely to change its monetary policy course having recently announced a neutral stance. As DailyFX analyst David Cottle mentioned, it is going to take the emergence of a stridently hawkish RBA to give AUD/USD bulls room to charge.
Chart compiled in Tradingview
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