Talking Points

  • Australia has just recorded its first monthly trade surplus since March 2014
  • It was a big one, too, and came in the face of expectations of a substantial deficit
  • And yet, the Aussie Dollar was unable to capitalize, having already gained strongly on USD

An already perky Australian Dollar was unable to rise much further despite shock news of the first Australian trade surplus for nearly three years.

The country was in the black to the tune of A$1.24 billion (US$909 million) in November, smashing estimates for a deficit of A$550 billion. This was Australia’s first overall surplus since March 2014 and its biggest since February of the same year. The numbers have clearly caught forecasters on the hop, but an increase in the attraction of Australia’s US-Dollar-priced commodities as the greenback rose has been cited as one reason for this stunning outperformance. There was a massive rise in the values of export staples coal and iron ore.

It’s often tricky for the Australian Dollar to capitalize on upbeat local data, and this batch proved no exception. AUD/USD had already risen to three-week highs after a softer snapshot of US private sector employment on Thursday. The trade data didn’t give it the impetus to push on in a market overwhelmingly concerned with official US labor numbers later in the global day.

Indeed, the Aussie Dollar actually slipped back a little. AUD/USD was at 0.7327 after the figures, from 0.7331 just before their release.

Big Surplus shock, small AUD/USD fall:

Aussie Dollar Unable to Capitalize on Trade Surplus Shock

Chart Compiled Using TradingView

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--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX