Australian Dollar Sees Short-Term Boost From GDP Results, But Carry Trade Selloff Tak

The Australian dollar initially gained last night across the majors on news from the Australian Bureau of Statistics, which surprisingly said that the economy grew by 0.4 percent in Q1 from the previous quarter, when GDP fell 0.6 percent. Meanwhile, the annual rate eased to a 0.4 percent pace as well from 0.8 percent, marking the sixth straight slowdown, though this certainly beat expectations of an all-out contraction. A breakdown of the report showed that consumer spending rose 0.6 percent, government spending increased 0.3 percent, and exports jumped 2.7 percent. Weaker points could be found in business investment, which dropped 6.1 percent, while imports slumped 7 percent. That said, the risk aversion that emerged during European trading eventually weighed FX carry trades down across the board, making the Australian dollar the third weakest of the day as AUD/USD plunged 2.51 percent and AUD/JPY dropped 2.28 percent.