AU Q1 2022 GDP preview and what comes next for the AUDUSD


This Wednesday, just one week before the highly anticipated June RBA Board meeting, Australian Q1 2022 GDP is set to drop. 

Due to the devastating floods in NSW and QLD and the Omicron outbreak at the start of the year, Q1 GDP is expected to rise by just 0.2%qoq, with annual growth decelerating from 4.2% to 2.5%yoy.

Digging into the details, trade is expected to detract from growth while investment and consumption are expected to contribute. The household savings rate, which hit 19.8% in Q3 2021 due to lockdowns, is expected to see another drop from 13.6% in Q4 2021 to 10% in Q1 2022 as consumers continue to open their wallets and shop up a storm.

The slowdown in the first Q1 of 2022 is not representative of what lays ahead for the Australian economy for the rest of 2022. According to the RBA’s updated forecasts in the recently released Statement of Monetary Policy,

“The Australian economy remains resilient and is expected to grow strongly this year. GDP is forecast to expand by 4¼percent over 2022. Growth is expected to moderate thereafter, to 2percent over 2023.”

Turning to the currency, the ability of the AUDUSD to bounce back above .7100c leaves the short sell off below .7000c exposed as an ugly false break lower. Supported by resilient commodity prices, a rebound in stocks and prospects of more RBA rate hikes, we look for the recovery in the AUDUSD to extend towards the 200-day moving average at .7260.

AUDUSD Daily Chart 30th of May

Source Tradingview. The figures stated are as of May 30th, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

How to trade with City Index

You can trade with City Index by following these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    Open an account in the UK
    Open an account in Australia
    Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

Source Tradingview. The figures stated are as of May 30th, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

Related tags: GDP AUD USD Forex Trading FOREX

Open an account today

Experience award-winning platforms with fast and secure execution.

Web Trader platform

Our sophisticated web-based platform is packed with features.
Economic Calendar