AUD/USD: Sluggish below 0.7300, shrugs off upbeat China trade numbers
- AUD/USD remains directionless even as China’s August month trade numbers mark a surge in the Exports, Trade Balance.
- A light calendar elsewhere, Sino-American tension and the US off restrict market moves in Asia.
- Calls of RBA’s action increase following the first recession in almost 30 years.
AUD/USD seesaws around 0.7280/85 during the early Monday’s trading. The aussie pair stays modestly changed although China’s August month trade numbers came out better than forecast. The reason could be traced from risk reset and a light calendar in Asia, not to forget the US holiday.
Surge in Exports widens China’s Trade Balance…
Despite China’s economic and political tussle with the US, India and Australia, the dragon nation’s trade numbers managed to defy any disappointment. The latest readings in terms of on-shore Yuan (CNY) suggest that the Trade Balance came in at CNY416.59 billion versus CNY196.21 billion expected and CNY442.23 billion last. Further details suggest, exports came in at +11.6% vs.+2.1% expected and +10.4% last while imports arrived at -0.5% vs. -0.7% expected and +1.6% prior.
Read more: China’s Aug Trade Balance (CNY): Surplus beats with CNY416.59 billion as exports jump
On the contrary, the US-China tension joins a light calendar day to weigh on the quote. Recently, China warned the Trump administration after American blacklisted Beijing SMIC. Additionally, fears of hard Brexit and the US dollar strength are other catalysts that restrict the Aussie pair’s latest moves.
Against this backdrop, S&P 500 Futures and Japan’s Nikkei 225 drop around 0.15% by the press time while Australia’s ASX 200 clings to the day’s open of 5,925 as we write.
Looking forward, the Labor Day holiday in the US will restrict the market’s moves but odds of American stimulus have gained after Friday’s upbeat 3employment numbers, which in turn can weigh on the quote. Also, Australia’s downbeat GDP has pushed several key banks, as well as economists, to call out RBA’s rate cut. While identifying the same, Bloomberg recently said, “Australia’s central bank will boost its bond-buying program or cut interest rates to help revive the economy from its first recession in almost 30 years, a survey showed.”
Technical analysis
Unless breaking an ascending trend line from late-July, around 0.7210, buyers can keep 0.7300 and 0.7340 on their radars.