We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
Oil - US Crude
Wall Street
More View more
Real Time News
  • EU Commission to mobilise EUR 750bln for European recovery fund - EUR 500bln grants - EUR 250bln loans $EUR
  • BREAKING: Reports on the wires that the EU is considering an EUR750bn virus recovery plan. EU Commission to unveil details later today. #EUR #EuropeanUnion #COVID19
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/9:30 AM GMT to gain insight on indices and commodities for the active trader. Register here: https://t.co/gghsFsZYlx https://t.co/MpELL4brE5
  • The Canadian Dollar has proven stable in recent weeks following a dramatic turn lower in March, guided to the downside by energy markets. Get your $USDCAD market update from @CVecchioFX here: https://t.co/7tlrn74X3t https://t.co/dXPFiHz6EA
  • Idea de #trading del día: $GBPUSD e #IBEX35 https://t.co/keSNWeUnM5 https://t.co/Cxv4P4zZWc
  • Heads Up:💶 ECB Guindos Speech due at 08:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-05-27
  • ECB PRESIDENT LAGARDE: - No new Euro debt crisis after pandemic, what matters is how borrowed money is spent - Not overly concerned about high debt levels #EUR #ECB
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.62%, while traders in US 500 are at opposite extremes with 76.70%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/01rko7aQXN
  • Heads Up:🇿🇦 Inflation Rate YoY due at 08:00 GMT (15min) Previous: 4.1% https://www.dailyfx.com/economic-calendar#2020-05-27
  • BoJ states that Break-even level for its ETF holdings is estimated to be around 18,500 for Nikkei stock average $JPY
Australian Dollar Gains as Construction Data Set to Burnish GDP

Australian Dollar Gains as Construction Data Set to Burnish GDP

2017-08-30 02:01:00
David Cottle, Analyst

Talking Points:

  • Australian construction work levels soared in the second quarter, hammering estimates
  • However, much of this vigour was related to a one-off LNG project
  • Still, things look good for construction’s GDP contribution and the Aussie Dollar liked the data

Just getting started in the AUD/USD trading world? Our beginners’ guide is here to help

The Australian Dollar gained Tuesday as construction data surged well ahead of estimates.

An official look at “construction work done” for the second quarter showed a gain of 9.3% compared to the first, hugely ahead of the 1% gain expected.

These figures feed into the official Gross Domestic Product release due next week and suggest that the construction sector will more than pull its weight in the Australian growth profile.

However, things may not have been as good in more recent months. Numbers released at the same time showed that overall building approvals fell 1.7% in July, but this was much less than the 5% fall which markets expected. The on-year slide was 13.9%, again better than forecasts which centred on a 16.6% fall.

AUD/USD rose after the data, with investors seeming to focus on those positive quarterly numbers.

Australian Dollar Gains as Construction Data Set to Burnish GDP

Some caution may be warranted when it comes to the sustainability of those figures. The Australian Bureau of Statistics said that much of construction’s second-quarter pep was due to work connected with the construction of a large new Liquified Natural Gas handling facility. This is of course a one-off which won’t be seen in later releases.

More broadly the Australian Dollar has been trading a mystifyingly narrow range against the US on its daily chart for weeks now. Admittedly it has not fallen very far from its high for 2017, which is also a more than 2-year peak. However, a rash of commentary from the Reserve Bank of Australia fretting what it fears would be the baleful effects of further currency strength seem to have kept the bulls in check. That’s even though there’s clearly an underlying appetite to buy the currency.

There has been little recent rhetoric of any sort from the central bank however, which seems to have emboldened investors to try the top of the range.

Australian Dollar Gains as Construction Data Set to Burnish GDP

However, it’s probably worth noting that the next Australian monetary policy decision is coming up early next week, on Tuesday. Official comment is usual sparse in the runup to policy calls and we can probably expect the RBA to reiterate its currency worries once the decision is out of the way. No change to the current, record-low 1.50% Official Cash Rate is expected.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter:@DavidCottleFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.