AUD/USD revisits sub-0.74 levels after Aussie trade data
- AUD/USD drops to 0.7398 after rejection at 0.7420.
- Australia's trade surplus rose more-than-expected in October.
- The AUD bulls ignore the upbeat data, take a breather.
The Aussie dollar isn't getting any lift from the upbeat Aussie data released an hour ago. The AUD/USD pair is currently trading in the red near 0.7403, having printed a low of 0.7398 soon before press time.
Australia's trade surplus rises
Australia's exports rose 5.4% month-on-month in October, following September's 6% rise. Meanwhile, domestic demand, as represented by imports, increased just 0.6% following September's 6.5% contraction.
The trade surplus rose to AUD 7,456 million from AUD 4,840 million, beating the expected rise to AUD 5,800 million. A widening of trade surplus is positive for the domestic currency.
However, the data released at 00:30 GMT has failed to draw bids for the Aussie dollar.
The currency looks to be taking a breather, having rallied by over 400 pips from 0.6991 to 0.7420 in the past month. The currency pair closed above 0.74 on Wednesday – the first close above the psychological hurdle since Aug. 8, 2018.
The factors responsible for the recent sell-off in the dollar, such as twin US deficits, expectations for additional US fiscal stimulus, and hopes for swift global economic recovery on potential coronavirus vaccines, could continue to keep the AUD better bid heading into the year-end. Should the equity markets correct, the US dollar will likely pick up a bid, pushing AUD/USD lower.
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.
