Insights 
VT 
The National Bureau of Statistics of China is set to release the quarterly GDP data at 02.00 GMT. For the third quarter, the GDP is forecasted to rise by 0.8%, a decrease from the 1.1% growth seen in the second quarter. Annually, the economy is projected to expand by 4.8%, down from the previous 5.2%. Retail sales are anticipated to grow 2.9% year-over-year in September, compared to the earlier 3.4% growth, while industrial production is expected to increase by 5.0%, a slight drop from 5.2%.
The AUD/USD currency pair has been trading negatively amid these economic forecasts. If the GDP and other data exceed expectations, the Australian Dollar could rise, challenging resistance levels at 0.6523, 0.6560, and 0.6620. Should the data disappoint, the AUD/USD might revisit support at 0.6472, potentially falling further to 0.6424 and the psychological level of 0.6400.
Impact Of Higher GDP
Higher GDP figures are generally beneficial for a nation’s currency, suggesting a growing economy. Conversely, lower GDP can negatively impact the currency by reducing economic attractiveness. A higher GDP also tends to lead to inflation, prompting central banks to raise interest rates, adversely affecting gold prices by increasing the opportunity cost of holding the metal.
With China’s Q3 GDP data due today, we are bracing for a slowdown to a 0.8% quarterly expansion from 1.1% previously. This expected weakness is already weighing on the AUD/USD, which is sensitive to Chinese economic health. For derivative traders, this creates a clear event to trade around in the coming weeks.
If the data surprises to the upside, exceeding the 0.8% consensus, we should consider buying AUD/USD call options or going long on futures. A stronger-than-expected number would suggest Beijing’s targeted stimulus is taking hold, potentially pushing the pair toward the 0.6523 resistance level. This would be a signal that the market has been overly pessimistic on China’s recovery.
Conversely, a miss on the GDP figure would confirm underlying economic weakness, making AUD/USD put options an attractive strategy. Such a result would likely see the pair test support at the 0.6472 level. This outcome would align with the persistent challenges we’ve seen in China’s economy throughout 2025.
Factors Beyond Headline GDP
Beyond the headline GDP number, we need to watch the details in the retail sales and industrial production figures for a clearer picture. We know that China’s property investment has continued its multi-year decline, falling around 9% year-on-year through the first three quarters of 2025. A weak retail sales number would confirm that poor consumer confidence remains a major drag on growth.
From Australia’s perspective, the Reserve Bank of Australia has held its cash rate steady at a restrictive 4.35% for most of the year to fight inflation. This high interest rate provides some support for the Aussie dollar, which could cushion its fall even if Chinese data disappoints. Australia’s export volumes to China have been stable, but commodity prices, like iron ore, have softened from their 2024 highs, creating a mixed picture.
We also have to consider the US dollar’s role in this, as a US federal government shutdown has now entered its 19th day. This political uncertainty is weighing on the dollar, which could limit the downside for AUD/USD regardless of the Chinese data outcome. The currency pair’s direction will be a result of which economy is perceived as having a worse outlook.
Looking back at similar data releases in 2024, we often saw that the market’s initial reaction was not always the sustained trend. Implied volatility for AUD/USD options is elevated, reflecting the uncertainty around this release. This suggests that strategies designed to profit from a large price move in either direction could be considered.
