Aussie Dollar Gains as Chinese Import Figures Fuel Risk-On Trade
- Australian Dollar climbs as China’s May trade data released
- Imports, in dollar terms, declined at slowest pace since 2014
- Trade data likely fueled risk-on rally as ASX 200 climbed
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The sentiment-linked Australian Dollar gained against its major counterparts after May’s Chinese trade data showed that in US dollar terms, imports fell 0.4 percent (YoY) versus -6.8 percent expected. This was the slowest contraction of goods bought from foreign countries since October 2014. Firming economic conditions in the world’s second largest economy can inspire a risk-on response in the markets. As such, ASX 200 futures traded alongside the Aussie higher.
The trade surplus registered at $49.98 billion, worse than the $55.70 billion expected but higher than $45.56 billion in April. Exports contracted 4.1 percent (YoY), worse than the -4.0 percent estimated and faster than the 1.8 percent decline in April. In Yuan terms, exports increased 1.2 percent (YoY) versus +1.5 percent estimated. Imports increased 5.1 percent compared to -2.5 percent expected. China’s trade balance surplusincreased to CNY324.80 billion versus CNY387.20 billion estimated.
Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing a narrowly negative reading. The SSI is a contrarian indicator, implying further AUD/USD gains ahead.
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