fbpx

Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

AUD/USD emerges with daily gains on upbeat Chinese trade data

Australian dollar managed to recover from an earlier daily loss and rose to fresh one-month highs against its US counterpart on trading Wednesday, after a report revealed Chinese imports and exports came in at considerably higher levels than expected in January.

AUD/USD reached a session high at 0.9068 at 6:05 GMT, also the pairs highest point since January 13th, after which consolidation followed at 0.9061, rising 0.27% for the day. Support was likely to be received at February 11th low, 0.8945, while resistance was to be met at January 13th high, 0.9086.

According to official data released earlier on Wednesday, Chinas export figure grew 10.6% in January compared to the same month a year ago, outperforming preliminary estimates, which pointed to a mere 2.0% increase. Imports rose 10.0% in January, again significantly outstripping expectations of a 3.0% gain. These figures came after the Lunar New Year holiday between January 31st and February 6th.

The surplus on Chinas trade balance expanded to 31.86 billion USD in January, the National Bureau of Statistics in China said, which exceeded the median estimate of experts, pointing to a surplus of 23.65 billion USD.

“Chinese imports coming in much better than expected is positive for both the Aussie and kiwi dollars,” said Desmond Chua, an analyst at CMC Markets in Singapore, cited by Bloomberg News. “There’s underlying strength in the dollar over the long term, though it may weaken against risk currencies in the short term.”

The Aussie was pressured earlier, after results in a survey by Westpack Banking Corporation showed, that the gauge of consumer confidence for Australia fell 3.0% in February, following another 1.7% drop in January.

Meanwhile, on Tuesday the US dollar remained mixed against its major peers, after Federal Reserve Chairman Janet Yellen underscored that central banks policy will remain accommodative, despite the current course of monetary stimulus tapering in “measured steps”.

“Let me emphasize that I expect a great deal of continuity in the Federal Open Market Committee’s approach to monetary policy”, Yellen told the House Financial Services Committee. She also reiterated that monetary policy was not on a “pre-set course” and the Fed may maintain borrowing costs close to zero “well past” the time the rate of unemployment in the country decreases below 6.5%.

Also yesterday, Federal Reserve President for Dallas, Richard Fisher, said that there was little “efficacy derived from additional expansion of the Fed’s balance sheet”. Fed President for St. Louis, James Bullard, is expected to take a statement later on Wednesday.

The central bank announced its decision to reduce monthly monetary stimulus by 10 billion USD to 65 billion USD at the meeting on policy in January, underscoring that labor market indicators, which “were mixed but on balance showed further improvement”, while nation’s economic growth has “picked up in recent quarters.” Fed policymakers are to hold their next meeting on March 18th-19th.

Retail sales in the United States probably remained flat in January compared to December, according to preliminary estimates, after a month ago they rose 0.2%. The Census Bureau is expected to release the official numbers on February 13th.

Elsewhere, the Aussie was gaining against the euro, with EUR/AUD cross down 0.26% on a daily basis to trade at 1.5054 at 8:03 GMT. AUD/NZD pair was losing 0.25% to trade at 1.0834 at 8:05 GMT.

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News