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Australian Dollar Falls as Trade Balance Turns Negative

Australian Dollar Falls as Trade Balance Turns Negative

Varun Jaitly, Contributor


Talking Points:

  • Australian Dollar and local bond yields fell following worse than expected trade balance data
  • Trade balance for Australia in November was -A$628m, underperforming analyst expectations
  • Trade balance figures for the month of October were also revised lower to a -A$302 deficit

Join Senior Currency Analyst Ilya Spivak on Tuesdays at 03:00 GMT as he as he discusses the technical and fundamental AUD/USD outlook for the week ahead. Sign-up on the DailyFX Webinar Calendar

The Australian Dollar fell against its major counterparts following the release of November’s trade balance figures. The data came out at –A$628m deficit, underperforming analyst expectations for an A$550m surplus. The previous month’s trade balance figures were also revised lower from an A$105m surplus to an A$302m deficit.

The trade balance data reported little change in exports from the month prior, while imports rose roughly 1 percent. Local bond yields fell alongside the Australian dollar, likely due to the worse than expected data and the downward revision in the previous month’s trade balance figures. Today’s price action comes after a 13-day rally in the AUD/USD.

With the revision in mind, the data release indicates 2 months of negative trade balance performance, which has not occurred since October of 2016. The Reserve Bank of Australia is not set to meet this month but will have its first policy meeting of 2018 on February 7.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.