AUD/USD extends gains by 10 pips as China's trade data beats estimates
- AUD/USD refreshes session highs as China reports a big jump in trade surplus.
- China's imports fell in April, indicating anemic domestic demand.
- The AUD could continue to rise with Australia planning to restart its economy from Friday.
AUD/USD rose from 0.6413 to 0.6423 following the release of the better-than-expected China trade data, having jumped from 0.6379 to 0.6410 in early Asia.
China's trade surplus widened to CNY 318.15 billion in April, bettering the estimate of CNY 39.50 billion by a big margin and up from the previous month's CNY 139.42 billion. Exports or outbound shipments rose 8.2% year-on-year following March's 3.5% drop and imports dropped by 10.2% year-on-year in April.
So far, markets have responded positively to the data. The S&P 500 futures jumped 2,843 to 2,851 alongside gains in the Aussie dollar. It's worth noting that the uptick in China's surplus has been fueled by export growth and drop in imports, which is a sign of anemic domestic demand. That, coupled with the escalating US-China tensions, will likely keep gains in the S&P 500 futures
Even so, the Aussie dollar may continue to gain altitude on optimism generated by Australia's decision to reboot its economy from Friday. The nation shutdown businesses six weeks ago to contain the coronavirus outbreak and has been relatively successful in keep fatalities low compared to the situation in the worst-hit nations like the US, Spain, and Italy. As a result, some observers believe Australia, along with New Zealand, which has also contained the virus outbreak, may become a safe haven.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
