GDP Numbers Sink the Aussie Dollar as Focus Shifts to the EUR and the Greenback

Earlier in the Day:

It’s was a relatively quiet start to the day on the economic calendar this morning. The Aussie Dollar was in action early on.

For the Aussie Dollar

2nd quarter GDP numbers provided direction early on. In the 2nd quarter, the Australian economy contracted by 7%, following a 0.3% contraction in the 1st quarter. Economists had forecast a 6% contraction. This was the largest quarterly fall on record.

According to the ABS,

  • Public demand slashed 7.9 percentage points from GDP, driven by a 12.15 tumble in household final consumption expenditure.
  • Spending on services slumped by 17.6%, driven by government restrictions and COVID-19 containment measures.
  • Net trade contributed 1.0 percentage point to GDP. Imports of goods fell by 2.4%. Falls in consumption and capital goods reflected weak domestic demand. Services imports slumped 50.5%, while the exports of services slid by 18.4% due to restrictions on travel and tourism.
  • Public demand contributed 0.6 percentage points.
  • The household saving to income ratio rose from 6.0% to 19.8%, fueled by the slide in consumption expenditure.
  • Hours worked fell a record 9.8%, with wages sliding by a record 2.5%.
  • Through the year, June 2019 to June 2020, the economy contracted by 6.3%.

The Aussie Dollar moved from $0.73591 to $0.73461 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.38% to $0.7344.


At the time of writing, the Japanese Yen was down by 0.10% ¥106.07 against the U.S Dollar, while the Kiwi Dollar was up by 0.12% to $0.6767.

The Day Ahead:

For the EUR

It’s a quieter day ahead on the economic calendar. Key stats include retail sales figures from Germany and unemployment numbers from Spain.

While the numbers from Spain will garner some interest, German retail sales figures for July will be the key driver.

A consumption-driven economy remains key. Any failure of existing fiscal and monetary policy support to loosen the purse strings would raise concerns over the economic outlook.

At the time of writing, the EUR was down by 0.10% to $1.1900.

For the Pound

It’s a particularly quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

A lack of stats will leave the Pound in the hands of Brexit chatter and market risk sentiment on the day.

At the time of writing, the Pound was down by 0.07% to $1.3375.

Across the Pond

It’s a relatively quiet day ahead in a busy week for the U.S Dollar. Key stats include August’s ADP non-farm employment change figures.

Following some disappointing weekly jobless claims numbers, the markets will be looking for a solid jump.

Away from the economic calendar, any chatter from Washington will also need monitoring.

The Dollar Spot Index was up by 0.13% to 92.459 at the time of writing.

For the Loonie

It’s a quiet day ahead on the economic data front. 2nd quarter labor productivity figures are due out later today.

We don’t expect the numbers to have too much influence, however, with COVID-19 having had a material impact on 2nd quarter data.

Away from the economic calendar, geopolitics and COVID-19 will remain key drivers on the day.

At the time of writing, the Loonie was down by 0.08% to C$1.3075 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.