WHEN IS THE AUSTRALIAN Q4 2022 GDP RELEASE AND HOW COULD IT AFFECT AUD/USD?

Australian GDP overview

Reserve Bank of Australia’s (RBA) readiness for further increase in interest rates and expectations of solid economic recovery highlights Australia’s fourth-quarter (Q4) Gross Domestic Product (GDP) figures, up for publishing at 00:30 GMT on Wednesday, for the AUD/USD pair traders.

The recent data from Australia portray a mixed picture as downbeat housing market data, inflation numbers and mixed employment report contrasts with upbeat Retail Sales. Even with these statistics in mind, the Aussie Q4 GDP is likely to print slightly better figures and could lure the AUD/USD bulls.

That said, forecasts suggest the annualized pace of economic growth to come in at 2.7%, softer than the previous period's 5.9%, while the quarter-on-quarter (QoQ) numbers could mark the improvement with 0.8% growth figures versus 0.6% prior.

Ahead of the outcome, Westpac said,

The economy was in transition heading into year-end as earlier policy and reopening supports worked against the adverse impacts of inflation and interest rates. Hence, we anticipate a soft read for domestic demand, with solid consumer spending being partially offset by flatness in building work and a modest decline in business investment. Westpac’s revised forecast is 0.8% QoQ, 2.8% YoY. 

How could it affect the AUD/USD?

AUD/USD grinds higher past 0.6700 amid upbeat expectations from the key economic data from Australia during early Wednesday. Adding strength to the recovery could be the US Dollar’s latest retreat, as well as hopes of more investments from China and the easing tussles between the Washington and Beijing after US President Joe Biden’s scaling back of the previous plans to restrict American investments in China, per Politico.

That said, Australia’s Q4 GDP is likely to carry less importance for the pair traders, considering the present focus on the risk-aversion and hawkish Fed bets, as well as the key events lined up for publishing in March, including China PMI and Fed meetings. Also likely to dilute the importance of the data is the latest Reserve Bank of Australia (RBA) monetary policy meeting that failed to impress the hawks despite showing readiness to inflation the benchmark rate.

Hence, positive data from Australia might offer a knee-jerk rebound in the AUD/USD prices but not affect the overall bearish trend. On the contrary, downbeat figures won’t hesitate to please bears with a fresh multi-month low.

Technically, AUD/USD seesaws around the 100-DMA and an upward-sloping support line from late November 2022, highlighting the importance of the 0.6700 support. However, bears remain hopeful of meeting the last December’s low near 0.6630 unless the quote rises past the 200-DMA hurdle surrounding 0.6800.