Key points
- Aussie dollar weighed down by disappointing Chinese trade figures
- CAD traders now look to Canadian trade balance data for June
The Australian Dollar lost ground against its Canadian counterpart on Tuesday, after the latest macro data out of China provided more evidence of a faltering economic recovery.
Data by the General Administration of Customs showed Chinese exports had contracted 14.5% year-on-year in July, which marked a third consecutive month of decrease and also the most considerable rate of decline since February 2020. Market consensus had pointed to a slower drop, by 12.5%.
Total imports shrank 12.4% year-on-year in July, or the most in six months and much more than market expectations.
The figures reflected weak demand both domestically and abroad.
The risk-sensitive Aussie Dollar reacted to the data, since China is Australia’s most important trading partner.
Meanwhile, CAD traders will be paying attention to the upcoming Canadian trade figures due out at 12:30 GMT.
Canada’s trade deficit probably narrowed to CAD 2.9 billion in June, according to market expectations, from CAD 3.44 billion in May. The latter has been the largest trade gap since October 2020, as total exports dropped 3.8% to an 18-month low of CAD 61.5 billion, mostly due to lower shipments of energy products.
As of 9:14 GMT on Tuesday AUD/CAD was edging down 0.37% to trade at 0.8755. Last week, the minor Forex pair went down as low as 0.8710, its weakest level since November 10th 2022, as risk sentiment took a hit following the downgrade of the United States’ top credit rating.
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