Aussie Dollar Falls as Trade Data Reboots RBA Rate Cut Bets
- Aussie drops after trade deficit widens to biggest in 6 months
- Disappointing data followed upbeat economic releases prior
- Australian bond yields hint atrebuilding RBA rate cut bets
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The Australian Dollar fell against its US counterpart after the former nation’s Trade Balance figures crossed the wires. The data showed that the country’s trade deficit widened A$3305 million in October, missing the –A$2600 million consensus. In addition, imports remained little changed from September while exports declined about 3 percent.
The data release appeared to fuel RBA rate cut bets. Looking at Australian front-end government bond yields, they declined with the Aussie after the release. In its most recent monetary policy statement, the Reserve Bank of Australia maintained a familiar data-dependent monetary policy outlook.
Perhaps the shock factor in today’s Trade Balance figures came from the decline in exports. A couple of days ago, the country reported that exports added 1.5 percent to the nation’s GDP in the third quarter. This bodes well for the Aussie because a large part of Australia’s revenue derives from exporting to its top trading partner, China. With exports falling in October, this presents a counter balance to the recent positive news flow.