AUD price, Chinese trade data, news and analysis:
- The Australian Dollar is advancing, and could well extend its gains, after news that China’s exports rose unexpectedly last month.
- The AUD is seen widely as a proxy for the Chinese economy as China is a major market for Australian exports.
AUD/USD firms, more gains possible
The Australian Dollar is gaining ground Thursday and its advance could well extend further after news of a surprise increase in Chinese exports in April. They climbed by 3.5% year/year, compared with the 15.7% fall predicted, marking the first rise so far this year.
That boosted AUD as the two countries are tied closely together by trade, making the Australian Dollar a useful proxy for China’s economic health. Moreover, the advance came despite accompanying news that China’s imports in April were down by 14.2% year/year – more even than the 11.2% forecast.
AUD/USD Price Chart, One-Hour Timeframe (April 29 – May 7, 2020)
Chart by IG (You can click on it for a larger image)
The release of China’s numbers came as the US and China continue to argue about both trade and the source of the coronavirus pandemic. US President Donald Trump said Wednesday that he would report in a week or two on whether China is fulfilling its obligations under a Phase 1 trade deal the two countries signed in January before the coronavirus spread globally.
Meanwhile, from a technical perspective, AUD/USD faces little resistance ahead of the April 30 high at 0.6570, which looks like a reasonable medium-term target.
You can discover why news events are so key to FX fundamental analysis, with guidance on how to interpret data, in our newly revamped education section here.
--- Written by Martin Essex, Analyst and Editor
Feel free to contact me via the comments section below
