AUD/USD hits 8-day high after Aussie GDP prints in line with estimates

• AUD/USD picks up a bid as Australian second-quarter GDP matches estimates.
• The economy expanded by 0.5% in the second quarter, as expected, having witnessed a 0.4% growth in the preceding quarter.

The bid tone around the AUD strengthened, pushing the AUD/USD to an eight-day high of 0.6778 after the Australian second-quarter gross domestic product (GDP) came in line with the estimates.

The GDP data released at 01:30 showed the Australian economy expanded by 0.5 percentage points quarter-on-quarter in the April to June period, bringing in the annual pace of growth to 1.4%, as expected.

The economy had expanded by 0.4% quarter-on-quarter and 1.8% year-on-year in the first three months of 2019.

The GDP comes a day after the Reserve Bank of Australia (RBA) kept rates unchanged at 1%, but left the doors open for more rate cuts in the near future.

The markets are currently pricing a 25 basis point rate cut in November and another rate cut in February.

A weaker-than-expected GDP data would have bolstered the dovish expectations, leading to a slide in the AUD. The data, however, matched estimates, as noted earlier, allowing a corrective bounce in the AUD/USD. After all, the slowdown in the annualized GDP was expected and priced in over the last few weeks.

As of writing, the AUD/USD pair is trading at 0.6778 and could rise further if equities put on a good show, as suggested by the 0.30% rise in futures on the S&P 500. Also, a better-than-expected China services PMI, due in a few minutes, could strengthen the bullish pressures around the AUD. 

Technical levels