Australian Dollar Trades Lower Even as Trade Deficit Shrinks

The Australian dollar fell today against its major peers even though economic data released during the trading session showed that Australia’s trade balance deficit shrank in August. The likely reason for the currency’s poor performance were expectations of monetary tightening from the US Federal Reserve.
Australia’s trade deficit narrowed from A$2.12 billion in July to A$2.01 billion in August while analysts had predicted an increase. Yet the Aussie was unable to profit from positive data, the same problem it had during the previous trading session. Yesterday, Chicago Fed President Charles Evans signaled that the US central bank is likely to raise interest rates before the end of the year, and such comments soured the traders’ sentiment towards riskier assets.
AUD/USD fell from 0.7620 to 0.7591 as of 9:22 GMT today. EUR/AUD rose from 1.4695 to 1.4737, and its daily high was at 1.4773.

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