Currency and bond markets greeted the better-than-expected second-quarter GDP result by pushing up the Australian dollar and selling government bonds, but the composition of growth underscored a weakening economy.
The Australian dollar rose a touch higher to a peak of US73.20¢ after the data was released at 11.30am AEST and the price on the three-year Australian government bond eked out two ticks to 99.70 to give an implied yield of 0.30 per cent. Both the currency and the bond held their gains by 2pm AEST.
“It was a limited reaction because the figures are so backward looking,” said Ray Attrill, head of FX strategy at National Australia Bank. The figures do not reflect the last few months’ lockdowns across Sydney, Melbourne and Canberra where activity has been hammered as economists turn their thoughts to the difficult September quarter.