Aussie plunges to new 2009 low on weak GDP reading

The Australian dollar tumbled to its weakest level in six years on Wednesday after an unexpectedly bad GDP growth reading took traders by surprise. Economic growth in Australia slowed to 0.2% in the June quarter from 0.9% in the March quarter, as lackluster mining and construction activity weighed on production.

The AUD/USD cross fell as low as $0.6981 on Wednesday afternoon in Sydney, its weakest level since September 2009, following the release of June-quarter growth data, from $0.7012 where the pair closed in New York overnight, and off an intraday high of $0.7033 just before the data was released.

Analysts expected to see a 0.4% GDP growth outcome last quarter, however, reduced mining and construction activity, coupled with a decline in exports contributed to the sharper slowdown in economic growth, according to the report.

Mining production tumbled 3% over the second quarter, while net exports detracted 0.6 percentage points from GDP growth in the quarter.

Public gross fixed capital formation was up 4.0% for the June quarter, but rose a subdued 0.4% year-on-year.