AU Q4 GDP stronger but tepid consumption eases RBA hike urgency and weighs on AUD/USD

Quarterly GDP exceeds RBA expectations with robust growth

Australia's fourth quarter (Q4) gross domestic product (GDP) figures showed a healthy expansion of 0.8% quarter-on-quarter (QoQ), lifting the annual growth rate to a solid 2.6%, comfortably above the Reserve Bank of Australia's (RBA) forecast of 2.3% from its February Statement on Monetary Policy.

Grace Kim, head of national accounts at the Australian Bureau of Statistics (ABS), stated: ‘There was broad-based economic growth in the quarter, with rises observed in a large majority of industries. Public and private demand each contributed 0.3 percentage points (pp) to GDP growth.’

She further noted, ‘GDP per capita increased for the fourth consecutive quarter and is now 0.9% higher than a year ago, the highest through the year growth since the December quarter 2022.’

Household consumption and implications for RBA

Despite the positive headline figures, there was some softness in the underlying details. Household consumption grew a subdued 0.3% QoQ, while the household saving ratio climbed to 6.9%, the highest since September 2022. This suggests that cost-of-living pressures are prompting Australians to save rather than spend additional income.

These GDP numbers ease the immediate pressure on the RBA to raise rates at the upcoming March meeting. However, the board remains vigilant about the ongoing conflict in the Middle East and its potential to cause a supply shock, which could feed into higher inflation.

Today's GDP figures likely suggest that the RBA will hold the cash rate steady at 3.85% at its March meeting, waiting to make any changes until after the quarterly inflation data is released at the end of April.

Impact on AUD/USD

The prospect of a steady RBA cash rate weighed on AUD/USD, pushing the pair down from the mid-0.7030s to a session low of 0.6983 shortly after the release. This erased much of its overnight rebound and the lift it had received from hawkish remarks by RBA Governor Michele Bullock, who flagged the risks of a supply shock feeding into already elevated inflation and noted that the March meeting was ‘live’.

AUD/USD technical analysis

In line with Monday’s update, the view remains that after AUD/USD hit a high of 0.7147 in mid-February, it was due for a period of consolidation, which is largely what has played out.

Looking ahead, a decisive break above resistance at 0.7150 – 0.7170 would indicate the correction from the recent 0.7147 high is complete, clearing the path for the Australian dollar to make further gains towards 0.7500. Until then, allow for further consolidation, with potential pullbacks toward 0.6900.

AUD/USD daily candlestick chart

• _{Source: TradingView. The figures stated are as of 4 March 2026 Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}