Insights 
VT 
The Australian Dollar briefly declined due to a lower-than-expected GDP figure but quickly rebounded. Strong private demand and resilient consumption supported the currency’s recovery. The AUD/USD was last recorded at 0.6575 levels, with contributions to growth arising from private investment and household consumption.
Private investment rose by 0.5 percentage points, marking the highest since Q1 2021, and household consumption increased by 0.3 percentage points. Public demand continued to bolster growth through government expenditure and investment, each contributing 0.2 percentage points. However, net trade and inventory drawdowns slightly detracted from GDP growth.
Economic Recovery Is Expected
The Australian Bureau of Statistics indicated mining inventories decreased due to heightened export demand for coal, while mining production slowed following a strong previous quarter. Economic recovery is expected to be sustained into the first half of 2026, primarily driven by domestic demand. This includes robust household consumption, a rebound in services, and stronger housing activities. The AUD has regained its losses, with a bullish momentum observed on daily charts. Resistance is estimated at 0.6610/40 levels, rising to 0.67, while support is at 0.6550 and 0.6510.
We see today’s softer-than-expected GDP print as a temporary headwind, not a change in trend for the Australian dollar. The currency’s immediate rebound above 0.6570 is telling, as the market is looking through the headline miss to the strength in private investment and household spending. This underlying domestic resilience is the key driver for our outlook into early 2026.
This resilient consumption is supported by a tight labor market, as evidenced by the November 2025 jobs report which saw unemployment hold at a low 4.1%. Furthermore, with the latest monthly CPI indicator for October 2025 showing inflation persisting at 3.8%, the Reserve Bank of Australia has little room to consider easing policy. This hawkish stance provides a solid floor for the AUD.
The main drags on growth, net trade and inventories, appear to be temporary distortions rather than signs of weakness. The drawdown in mining inventories was specifically to meet strong export demand, a bullish signal which is further supported by iron ore prices stabilizing around $125 per tonne. We view this as a sign of healthy external demand that should normalize in the coming quarters.
Derivative Traders Suggested Strategy
For derivative traders, this suggests a bullish bias in the coming weeks. We believe buying call options or call spreads on the AUD/USD with strike prices targeting the 0.6640 to 0.6700 resistance levels could be a prudent strategy. This view is strengthened by a favorable policy divergence, as the US Federal Reserve appears to have peaked its hiking cycle while the RBA is set to remain firm.
We would use a break below the 0.6550 support, and certainly the 21-day moving average near 0.6510, as a signal to reassess this bullish position. This pattern is reminiscent of periods we observed back in 2023, where headline growth was often clouded by volatile external accounts while the domestic story remained the true driver. Therefore, focusing on the domestic data will be crucial.
