The Australian dollar is up a little after the economic growth data showed the slowest q/q in two years:
The details capturing the most attention are not encouraging:
- savings rate fell to its lowest since the December quarter of 2007 (households are saving much less of their income to sustain even weak spending)
- and the Australian Bureau of Statistics says: Government spending and capital investment were the main drivers of GDP growth this quarter
Capex is always welcome but governments splashing out cash are making the job of the Reserve Bank of Australia that much more difficult, more government fiscal support is blunting the impact of higher rates. Australian inflation remains well above the upper end of the 2 – 3 % target band (the latest CPI was 5.4% y/y, from the quarterly data for the September quarter).
AUD update, it popped going into the release and has since ticked just a few tics higher: