The Australian dollar rallied today after the release of China’s trade data. The currency gained even as the nation’s central bank signaled that it is not going to raise interest rates in the near future.
China’s trade balance showed a deficit of $4.98 billion in March, which was a total surprise to economists who were counting on a $27.1 billion surplus. The interesting part of the report was that, despite all the trade war rhetoric, China increase imports from the United States.
The Reserve Bank of Australia released the Financial Stability Report, in which it highlighted risks of higher interest rates. Earlier this week, RBA Governor Phillip Lowe said:
Because the progress is expected to be only gradual, the Reserve Bank Board does not see a strong case for a near-term adjustment in monetary policy.
He added further:
A continuation of the current stance of monetary policy in Australia will help our economy adjust and should see further progress in reducing unemployment and having inflation return to target.
AUD/USD rallied from 0.7753 to 0.7785 as of 13:44 GMT today, though retreated from the daily high of 0.7810. EUR/AUD declined from 1.5887 to 1.5832, and its daily low was at 1.5775. AUD/JPY was at 83.79 after opening at 83.19 and touching the session maximum of 84.08.
If you have any questions, comments or opinions regarding the Australian Dollar,
feel free to post them using the commentary form below.