The Australian and New Zealand dollars held steady against their U.S. counterpart on Wednesday, after Australian economic growth data came out below expectations and as tensions with North Korea continued to weigh on market sentiment.
AUDUSD was little changed at 0.7993, just off the previous session’s five-week high of 0.8028.
The Australian Bureau of Statistics reported on Wednesday that the country’s gross domestic product expanded by 0.8% in the second quarter, below expectations for an expansion of 0.9% and after a growth rate of 0.3% in the previous quarter.
Year-on-year, the Australian economy grew 1.8% in the last quarter, disappointing expectations for an expansion of 1.9%.
Elsewhere, NZDUSD was also little changed, trading at 0.7234.
Meanwhile, investors continued to focus on geopolitical tensions, after a North Korean diplomat on Tuesday warned that his country was ready to send “more gift packages” to the U.S.
The threat came after the rogue regime conducted its sixth and largest ever nuclear test on Sunday, prompting U.S. Defense Secretary James Mattis to say that any threat to the U.S. or its allies would be met with a “massive military response”.
Separately, the greenback remained under pressure after Federal Reserve official Lael Brainard said on Tuesday that the central bank should delay raising interest rates until it is confident inflation that is now “well short” of target will rebound.
The U.S. dollar had already broadly weakened after data earlier Tuesday showed that U.S. factory orders declined in July, sparking concerns over the strength of the manufacturing sector.