AUD/USD dropped to a three-week low of 0.7739 as the 10Y Aussie-US yield spread limited to 37 premise focuses after Australia detailed a weaker-than-anticipated second from last quarter expansion figure.

The second from last quarter swelling as spoke to by the purchaser value file (CPI) came-in at 0.6% q/q versus 0.8% anticipated. The annualized figure dropped from 1.9% to 1.8%. The Reserve Bank of Australia (RBA) takes into account several center measures of CPI when setting strategy, including the trimmed mean and weighted middle, which too have printed underneath gauges. The RBA trimmed mean CPI cooled to 0.4% q/q from 0.5%.

Along these lines, the offered tone around the AUD reinforced on the back of feeble expansion number. Security markets have begun pricing-in a deferral in the RBA fixing. The 10-year Aussie-US yield spread tumbled to 37 premise focuses from the pre-information level of 40.6 premise focuses.

Given the frail expansion number, the AUD is probably going to stay on the back foot in Europe. The 200-DMA support of 0.7692 could be ruptured in a persuading way if the US strong merchandise orders beat desires.