Forex - AUD/USD approaches 3-week high after GDP data

Forex Pros – The Australian dollar was higher against its U.S. counterpart on Wednesday, after government data showed that the nation’s economic growth contracted less-than-expected in the first quarter.

AUD/USD hit 1.0751 during late Asian trade, the daily high; the pair subsequently consolidated at 1.0736, gaining 0.61%.

The pair was likely to find support at 1.0604, the low of May 27 and resistance at 1.0888, the high of May 11.

The Australian Bureau of Statistics said gross domestic product contracted by 1.2% in the first quarter of 2011, after expanding by 0.8% in the previous quarter. Economists had been expecting a 0.7% contraction in the three months to March.

It was the biggest drop since Australia’s last recession in 1991, as flooded coal mines, railways and farmland hurt exports.

The report showed that Australia’s economy grew at an annualized rate of 1.0% in the first quarter, broadly in line with expectations, after rising at an annualized rate of 2.7% in the previous quarter.

The Australian dollar was also boosted after data showed China’s manufacturing expanded in May at a faster pace than forecast. China is Australia’s largest trading partner.

The Aussie was also up against the yen, with AUD/JPY rising 0.43% to hit 87.37.

Later Wednesday, U.S. payroll processing firm ADP was to publish its report on non-farm payrolls. Elsewhere, the U.S. Institute of Supply Management was to publish data on manufacturing activity.

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