The Australian dollar slightly rose against the US dollar on Wednesday. The current AUDUSD exchange rate stands at 0.6658.
While the Aussie had been steadily rising due to the weakening US dollar, the market now needs to react quickly to Australia’s domestic statistics. The news coming from this side appears quite unsettling.
Australia’s GDP in Q1 increased by 1.1% year-over-year, slightly below the expected 1.2% and the previous 1.6%. On a quarterly basis, the Australian economy expanded by a nominal 0.1%, falling short of the forecasted 0.2%.
The weakening momentum in the country’s economy may be due to seasonal factors and a high base effect. However, the deterioration of foreign trade relations is also highly likely to play a significant role.
Australia’s services PMI decreased to 52.5 points in May from the previous 53.6 points, with the overall PMI coming in at 52.1 points compared to 53.0 points a month earlier. This decrease is not positive news, indicating that business activity is naturally responding to the economic slowdown and reduced domestic demand.