FX.co ★ Aussie Dollar Muted Despite Stronger GDP

The Australian dollar remained relatively stable at approximately $0.652 on Wednesday, following a 0.5% decline in the prior session. This steadiness was primarily due to the strength of the US dollar, which countered positive domestic GDP figures. The US dollar maintained its strength, bolstered by increased demand for safe-haven assets amid global economic uncertainties, renewed trade tensions, and geopolitical risks. Additionally, worries about escalating debt levels in major economies further enhanced the dollar's appeal. Domestically, Australia's economy expanded by 0.6% in the second quarter, exceeding forecasts of 0.5% and accelerating from a revised 0.3% in the first quarter, marking the 15th consecutive quarter of economic growth. Annual GDP growth also reached 1.8%, the fastest rate since the third quarter of 2023. Despite these positive indicators, investor sentiment remained cautious. Market swaps indicated over an 80% probability that the Reserve Bank of Australia would maintain its current interest rates later this month. In other developments, the Australian dollar, often seen as a proxy for China's economic performance, received additional support from robust Chinese services data, which reached its highest level in 15 months, indicating sustained regional demand.