AUD/USD Remains Pressured After China Trade Data
- China’s exports plunged 7.3% in October
- This was better than September’s 10% swoon, but still clearly weak
- AUD/USD was already pressured and duly slipped further
The Australian Dollar edged down against its US cousin on Tuesday after another set of quite gloomy Chinese trade data.
Exports fell 7.3% on-year on a USD-denominated basis in October. That was better than the 10% plunge seen in September, but clearly another weak month.
Imports declined 1.4%, which was also better than the previous month when the fell 1.9%.
Those data left China with a trade surplus of US$49.06 billion, above September’s US$41.99 billion.
The Australian Dollar often functions as the foreign exchange market’s favourite China proxy. The currency can provide investors with a liquid bet on China’s fortunes given Australia’s vast export ties to the world’s number-two economy.
However, the Aussie was already on the backfoot on Monday, thanks to a generally stronger greenback and a weaker reading for Australian business confidence (according to a survey from NAB, a bank).
The Chinese data appeared to do little to shake these themes.
AUD/USD traded around 0.77 or so before before the numbers, and 0.76951 right afterward.
Of course Austrralian markets are watching the US presidential vote as closely as all the others, which may account for the Aussie Dollar’s relative torpor in the wake of these numbers.
The trade data will add to ongoing worries about Chinese industrial overcapacity, regional house prices and the expansion of credit.
AUD/USD: Heading down anyway
Chart created using TradingView