Australian Dollar Leaps As Trade and Building Data Smash Consensus
- Australia’s trade surplus soared ahead of expectations in September
- Building-permit levels did likewise
- The Australian Dollar duly gained, but question marks still glower over domestic demand
The Australian Dollar caught a strong bid Thursday following some expectation-shredding economic data.
The county’s September trade surplus romped in at A$1.74 billion (US$1.3 billion). That was hugely better than the A$1.2 billion expected. Exports took off by 3% on the month with imports rising only 0.5%.
Building permit levels for the same month also smashed consensus, rising 1.5% from August when a 1% fall had been expected.
These numbers boosted AUD/USD, unsurprisingly, as they show that parts of the Australian economy are extremely robust. However, prices and wage levels remain subdued and private debt levels are stratospheric, both of which may mean that Thursday data have little bearing on the interest-rate prognosis. The trade data back up a picture of a revving Australian external sector with domestic demand lagging behind.
The Reserve Bank of Australia is expected to leave the Official Cash Rate alone at its 1.50% record low until well into next year, according to rate-futures markets. Investors will get the RBA’s next steer on the matter next Tuesday when the central bank will give its November monetary-policy decision.
On its broader, daily chart, AUD/USD remains very much stuck in the persistent downtrend which has characterised trade since the year’s highs were marked in September. However, the last few days’ action has seen the pair possibly attempting to build some kind of base at this week’s lows, in the 0.76390 area.
Thursday’s strong Australian numbers may contribute a lot to this process, and the weekly closing level will now be most interesting.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.