AUD/USD rises to near 0.6620 despite weak Australian Trade Balance data

AUD/USD gains to near 0.6620 even as the Australian Trade Balance data for August came in weaker than expected.
The RBA kept its interest rates steady at 3.6% in the policy meeting this week, as expected.
Weakening US job market has boosted Fed dovish bets.

Sagar Dua FXStreet

The AUD/USD pair trades 0.15% to near 0.6625 during the European trading session on Thursday. The Aussie pair gains despite the Australian Trade Balance data for August coming in weaker than projected.

Earlier in the day, the Australian Bureau of Statistics reported that the Trade Surplus in August came in at 1,825 million on a monthly basis, significantly lower than the estimated 6,500 million and the prior reading of 7,310 million.

Theoretically, soft Trade Balance data weighs on the Australian Dollar (AUD) as the nation’s export market contributes significantly to its overall growth.

Going forward, market expectations for the Reserve Bank of Australia’s (RBA) monetary policy outlook will remain key trigger behind the next move in the Australian Dollar. On Tuesday, the RBA held its Official Cash Rate (OCR) steady at 3.6%, as expected, and warned that inflation is proving to be persistent than what had been anticipated earlier.

“Components of the monthly CPI are a little higher than expected, and inflation is not running away,” RBA Governor Michele Bullock said at a post-meeting press conference.

Meanwhile, the US Dollar (USD) struggles to gain ground as the slowing United States (US) job market has prompted expectations for more interest rate cuts by the Federal Reserve (Fed) this year. The US ADP Employment report showed on Wednesday that the private sector labor force witnessed a reduction of 32K employees in September, while economists anticipated that 50K fresh workers were added in that period.

Another reason behind weakness in the US Dollar is the US government entering a shutdown after the stopgap bill failed to gain a majority in the House of Senate on Tuesday.

Economic Indicator

Trade Balance (MoM)

The trade balance released by the Australian Bureau of Statistics is the difference in the value of its imports and exports of Australian goods. Export data can give an important reflection of Australian growth, while imports provide an indication of domestic demand. Trade Balance gives an early indication of the net export performance. If a steady demand in exchange for Australian exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD corrects lower, returns to 1.1650

EUR/USD could not sustain an earlier move to fresh tops just above 1.1680 on Thursday, coming under fresh selling pressure and revisiting the mid-1.1600s in the latter part of the NA session. The pair’s correction comes in response to an acceptable bounce in the US Dollar.

GBP/USD attempts some consolidation near 1.3350

GBP/USD is alternating gains with losses near 1.3350 on Thursday. The Greenback’s attempts to recover aren't really sticking, upbeat data or not, as traders stay confident that the Fed will deliver a 25 bps rate cut at its final meeting of the year.

Gold bull-bear tug-of-war extends ahead of US data

Gold struggles around $4,200 early Friday, eyes a modestly flat close to the week. US Dollar turns south alongside Treasury bond yields amid Fed rate cut buzz. Gold remains confined within a tight range; buyers refuse to give up yet.

XRP slides amid record on-chain activity, mixed technical signals

Ripple (XRP) is trading under pressure at the time of writing on Thursday, after bulls failed to break the short-term resistance at $2.22. The reversal may extend toward Monday’s low of $1.98, especially if risk-off sentiment persists in the broader cryptocurrency market.

Why the Fed may cut rates in December: Understanding the policy shift

The Fed has gone through a noticeable policy swing in recent months - from initiating a rate cut, to signaling a potential pause, and now shifting once again toward another cut in December. This has created understandable confusion among traders and investors trying to interpret the Fed’s reaction function.

XRP edges lower despite record on-chain activity and steady ETF inflows

Ripple is trading under pressure at the time of writing on Thursday, after bulls failed to break the short-term resistance at $2.22. The reversal may extend toward Monday’s low of $1.98, especially if risk-off sentiment persists in the broader cryptocurrency market.