The Australian dollar struggled to continue its rally versus the US dollar and the Japanese yen as the reports today showed that the number of building permits fell and the exports shrank. The currency also continues its decline against the euro.
Australia’s exports of goods and services declined 4% (A$1,003 million) in January. The trade balance remained positive as the imports also fell, but the surplus was lower than in the previous month. The seasonally adjusted estimate for total dwellings approved in Australia contracted 15.9 percent, following the increase of 10.0 percent in the previous month. Market participants expected a noticeably smaller decline by 3.1 percent.
The Australian currency also fell because the service industries in China, the major trading partner of Australia, shrank. The poor fundamentals sparked the talks about reduction of the Australian interest rates.
AUD/USD traded near 1.0173 as of 6:21 GMT today after it went up on the yesterday’s trading session from 1.0132 to 1.0168. EUR/AUD traded at 1.3630 after it advanced yesterday from 1.3593 to 1.3622. AUD/JPY traded at about 83.29 after the yesterday’s rise from 82.94 to 83.20.
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