Australia's
economy grew at the fastest pace in a year last quarter as the nation
shipped more resources abroad, built more homes and bought more consumer
goods, an upbeat surprise that sent the local dollar bounding ahead.
Wednesday's
data showed gross domestic product (GDP) expanded by 0.9 percent in the
first quarter, up from 0.5 percent the previous quarter. That outpaced
forecasts of 0.7 percent and lifted the dollar above 78 U.S. cents AUD=D4.
"It puts Australia in a unique position of being one of the few developed economies which have had a pretty solid start to the year," said Tom Kennedy, an economist at JPMorgan.
"It supports the argument for the RBA to sit back and evaluate how the easing to this point has filtered through the economy."
The Reserve Bank of Australia (RBA) has done its best to shore up demand by cutting interest rates twice this year to an all time low of 2 percent, and might yet have to act again.
Interbank futures <0#YIB:> imply a 60 percent probability of another easing by Christmas, though few see much chance of a move in the next few months.
Low rates have been doing their work, with home building up almost 5 percent in the quarter while consumers spent more on cars, communications, household goods and eating out.
Signs are demand has held up, with sales of new vehicles running firm through both April and May. Industry data out on Wednesday showed sales of sports utilities broke all records in the year to May.
"It puts Australia in a unique position of being one of the few developed economies which have had a pretty solid start to the year," said Tom Kennedy, an economist at JPMorgan.
"It supports the argument for the RBA to sit back and evaluate how the easing to this point has filtered through the economy."
The Reserve Bank of Australia (RBA) has done its best to shore up demand by cutting interest rates twice this year to an all time low of 2 percent, and might yet have to act again.
Interbank futures <0#YIB:> imply a 60 percent probability of another easing by Christmas, though few see much chance of a move in the next few months.
Low rates have been doing their work, with home building up almost 5 percent in the quarter while consumers spent more on cars, communications, household goods and eating out.
Signs are demand has held up, with sales of new vehicles running firm through both April and May. Industry data out on Wednesday showed sales of sports utilities broke all records in the year to May.
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