Aussie Dollar Reversed Higher on Widening Trade Deficit
The Australian Dollar received initial selling pressure versus the U.S. Dollar after the trade balance figures reported a deepening deficit, printing at -A$556 million for July. Moreover, June’s data was subsequently revised down to –A$227 million from +A$9 million. The Aussie economy has been running a trade deficit since January of this year ranging between the low established at -A$1,012 million in March and high established at -A$211 in April. Slowing Chinese demand for Australia’s key export, iron ore, appears to be a material contributor underlying the deficit's decline.
Most risk-linked assets traded higher during yesterday’s session as the European Central Bank announced plans to monetize their troubled nation’s debt which likely provided support for the immediate recovery. Later today in the U.S. session Non Farm Payrolls are scheduled for release. Fed’s Bernanke had recently stated at Jackson Hole that the central bank will provide liquidity to markets if necessary, and specifically expressed concern over the viscous jobs recovery.
AUD/USD, 1 Minute Chart
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