The Australian dollar was trading in the green during Thursday’s trading session. The trade data released in Australia today was unimpressive but that did not prevent the currency from rebounding after Tuesday’s big slump.
The Australian Bureau of Statistics reported that the seasonally adjusted trade balance surplus shrank from A$7.25 billion in July to A$5.93 billion in August. The actual value was close to the consensus forecast of $6.00 billion.
The Australian Industry Group Australian Performance of Services Index rose slightly from 51.4 to 51.5 in September on a seasonally adjusted basis. The reading above the neutral 50.0 level means that the sector remains in the expansionary territory. The report commented on the result:
It was the second month of mildly positive conditions following a weak month in July, as trading conditions for some businesses returned to similar levels seen earlier in the year.
The data was not extremely positive, though, as expansion was registered only in three of eight sectors.
Today’s rebound of the Aussie followed a big drop on Tuesday caused by a dovish interest rate cut by the Reserve Bank of Australia. The dovish outlook for monetary policy and the possibility of another cut in November made some market analysts argue that the upside potential of the Australian currency is limited. Indeed, despite the bounce the Aussie remains one of the weakest currencies for the week.
Now, traders wait for tomorrow’s data. The most important release should be a retail sales report. Ahead of the release, experts predicted that the report will show an increase of 0.5% in August. The indicator slipped 0.1% in July.
AUD/USD rose from 0.6704 to 0.6719 as of 10:49 GMT today, and its daily high was at 0.6727. EUR/AUD declined from 1.6333 to 1.6301. AUD/JPY edged up from 71.85 to 71.97.
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