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Australia Economy Grows Less Than Forecast in First Quarter

Australia ’s economy expanded less than economists forecast last quarter as machinery and equipment investment declined, sending the currency lower as traders increased bets on further interest rate cuts. First-quarter gross domestic product advanced 0.6 percent from the previous three months, when it expanded at the same pace, a Bureau of Statistics report released in Sydney today showed. The result compared with the median of 25 estimates in a Bloomberg News survey for a 0.7 percent gain. The Reserve Bank of Australia slashed borrowing costs by 2 percentage points over the past 20 months to 2.75 percent, joining global counterparts in embracing record-low interest rates . Traders boosted bets the RBA will cut again in August, swaps data compiled by Bloomberg show. “The underlying feel of today’s release is pretty soft,” Scott Haslem, Sydney-based chief economist for Australia at UBS AG, Switzerland ’s biggest bank, said in a phone interview. He accurately forecast the 0.6 percent first-quarter gain in growth. “It certainly increases the likelihood that the RBA will trim the cash rate over the next couple of months.” The local dollar traded at 96.13 U.S. cents at 11:54 a.m. in Sydney, from 96.35 cents before the release. Compared with a year earlier , the economy expanded 2.5 percent in the first quarter, today’s report showed. The median forecast of economists in a Bloomberg News survey was for a 2.7 percent rise. Spending Rises Household spending rose 0.6 percent in the first quarter, adding 0.3 percentage point to GDP growth, today’s report showed. Non-dwelling construction advanced 7.6 percent last quarter, adding 0.6 point to the expansion, it showed. Machinery and equipment fell 6.9 percent, subtracting 0.4 percentage point from GDP growth, while public spending dropped 15.3 percent, subtracting 0.9 point. Changes in inventories reduced growth by 0.4 percentage point. […]

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  • EUR/USD Gold CorrelationAustralia Economy Grows Less Than Forecast in First Quarter
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  • Australia Economy Grows Less Than Forecast in First Quarter
  • Australia Economy Grows Less Than Forecast in First Quarter
  • Australia Economy Grows Less Than Forecast in First Quarter
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