Australian GDP Impressive, AUD/USD Continuing Bullish

The increase in Australia's GDP which was quite impressive in the fourth quarter of 2021 was driven by the recovery in household spending after the COVID-19 restrictions. AUD/USD continues to strengthen.

On Wednesday (02/March), the Australian Bureau of Statistics released data on GDP for the fourth quarter/2021 which increased by 4.2 percent on an annual basis (Year-over-Year). This figure is better than the 3.9 percent growth in the previous quarter, as well as exceeding economists' expectations for a 3.7 percent increase.

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On a quarterly basis (Quarter-over-Quarter), the Australian economy has increased by 3.4 percent. This pace of increase is quite impressive as it recovered quickly after contracting 1.9 percent in the third quarter. Historically, the GDP figure this time was also higher than the pre-pandemic level in December 2019.

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Domestic demand, which contributes to more than half of the economy, is the catalyst driving Australia's GDP data. In more detail, household final consumption expenditure (Household Final Consumption Expenditure) contributed 3.2 percent of total GDP growth in the last quarter of 2021.

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Household spending was reported to have increased by 6.3 percent, spending on services was recorded to have increased by 6.3 percent, then spending on hotel accommodation, restaurants and cafes was recorded to have increased by 24.3 percent. In addition, spending on recreation increased 17.1 percent and health increased 7.9 percent. These increases are inseparable from the lifting of the COVID-19 restrictions so that consumers can return to their normal activities.

Supported by commodity rally, AUD/USD continues to be bullish

The release of Australian GDP data which was pretty good this morning has increasingly supported the Australian Dollar's rally. This condition is reflected in the movement of the AUD/USD pair which is moving in the range of 0.7264, strengthening 0.21 percent from the daily open price. Fundamentally, the Australian Dollar still has the potential to strengthen further due to rising sentiment in commodity prices amid the Russia-Ukraine conflict. Australia is a country that relies on commodity exports, so strengthening the commodity sector has a positive impact on its currency.