Australia’s Trade Balance issued a narrower surplus than expected in January, printing at A$970 million versus forecasts of a A$1.1 billion result. Still, the reading marks an improvement over a revised A$414 million surplus registered in the previous month as a drop in imports (-7.3%) outpaced the decline in exports (-5.0%). Consumer spending is likely to remain sluggish in the near to medium term as falling consumer confidence and a rising unemployment rate trim demand, opening the door for continued improvement in trading terms. On balance, the current trajectory sets the stage for strength in the long term outlook for the Australian Dollar against currencies corresponding to countries/regions where the external balance is expected to continue to deteriorate, such as the Euro and the Yen.
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