The Australian dollar was firm across the board today despite trade data from China, Australia’s biggest trading partner. While China’s trade surplus increased, the report was not necessarily good.
China’s trade balance posted a surplus of $50.98 billion in June, up from $41.73 billion in the previous month and $40.91 billion a year ago, reaching the highest level since December of the last year. It was also above the consensus forecast of $44.65 billion. Yet the data was not good at all, it is just that imports were falling faster than exports. Exports fell 1.3%, while imports dropped by 7.3%.
The data showed that the US-China trade war had an impact on China’s economy. But the US tariffs did not have an intended effect of reducing the US trade deficit with China. In fact, China’s surplus with the United States increased by 11% as exports declined 7.8% while imports slumped 31.4%.
AUD/USD jumped from 0.6974 to 0.7017 today. EUR/AUD dropped from 1.6133 to 1.6047. GBP/AUD declined from 1.7949 to 1.7906.
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