Australia’s economy grew strongly earlier this year

The national accounts released today showed the Australian economy in the second quarter expanded by a solid 0.9% and 3.6% YoY. It’s the third consecutive quarter of economic expansion for the Australian economy.

First quarter of re-opened domestic and international borders was behind a substantial rise in consumer spending and net export growth, offsetting weakness in housing and inventories. Exports of goods and services contributed 1.1% points to GDP growth. The rises were broad-based across rural and mining goods and services exports. Exports of services rose 13.7%, reflecting education-related travel as international students returned to Australia.

Today’s figures coincided with the start of RBA’s rate hiking cycle in May and come just one day after the RBA raised rates by 50bps to 2.35%, leaving Q3 as the one that should reveal the impact of the RBA’s 225bps of rate hikes to date. The failure to break above resistance at 0.6850/70 earlier this week, the AUD/USD is moving towards the June 0.6681 low, unable to patience the heat of an unrelenting rise in the USD and in USD/CNY.