Fundamental Comment

Aussie dollar climbs to six-week high after upbeat GDP data

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The Australian dollar rose 0.8% against the US dollar to a six-week high for the second time this week, supported by the recovery of the Australian economy's growth in the first quarter.

The Australian economy's gross domestic product (GDP) for the first quarter showed a 1.0% growth, compared to expectations of a 0.9% growth and a 0.5% increase in the last quarter of 2017.

The economy grew an annualized 3.1% from a previous of 2.4%, where expectations were for a 2.8% growth.

The recovery is clear evidence of the success of the Reserve Bank of Australia's monetary policy, which continues to hold on fixed interest rates at a record low of 1.50%.

On the other hand, the U.S. dollar fell for the third session in a row to its lowest level in nearly two weeks at 93.56, according to the dollar index, as investors moved to the stock and bond markets in the current period.

However, the dollar remains strong with support from improved economic data and outlook for the U.S. economy, noting that the current decline in dollar levels may be a downside correction.

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