AUD/USD keeps losses after above-forecast China trade surplus
- AUD/USD is not impressed by a better-than-expected China trade surplus.
- The drop in imports indicates a weakness in domestic demand.
- The AUD may pick up a bid on hawkish comments by Westpac's head.
A better-than-expected China trade balance is struggling to put a bid under the Aussie Dollar – a G-7 proxy for China.
The nation's trade balance widened to $42.81 billion in October, bettering the estimate of $40.10 billion. Imports fell 6.4% year-on-year in USD terms and by 0.4% in CNY terms. Meanwhile, exports or outbound shipments fell 0.9% in USD terms but rose 4.9% in CNY terms.
While trade surplus increased, the dismal performance of imports indicated weakening domestic demand is a cause for concern and could revive fears of a deeper economic slowdown in the world's second-largest economy.
Hence, AUD's muted response to the upbeat headline is not surprising. Currently, the pair is trading at 0.6882, having added just five pips post-China data. The pair is still reporting a 0.22% drop on the day.
The AUD, however, may pick up a bid as Westpac's boss while speaking at his six-monthly grilling before a parliamentary committee said more interest rate cuts by the Reserve Bank of Australia (RBA) might have a "perverse" impact on the economy.
The RBA's statement of monetary policy released earlier today also said that further easing might convey an overtly negative view on the economy.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
