AUD/USD soars above 0.6670 on upbeat Aussie Trade Balance data, Caixin Manufacturing PMI slips

The AUD/USD pair has climbed swiftly above 0.6670 on upbeat Australian Trade Balance data. The Australian Bureau of Statistics has reported upbeat Trade Balance data. The economic data has jumped to 15,269M, higher than the estimates of 12,650M and the former release of 13,870M.

Meanwhile, the Caixin Manufacturing PMI (April) data have missed estimates. The economic data has landed at 49.5, lower than the estimates of 50.3 and the former release of 50.0. Despite fiscal and monetary support the Chinese economy is struggling to remain on track of progress.

It is worth noting that Australia is the leading trading partner of China and weak Chinese manufacturing PMI would impact the Australian Dollar.

On Wednesday, the Australian Dollar didn’t show a meaningful action despite the release of upbeat  Retails Sales data. Australian agency reported an acceleration in retail demand by 0.4%, the slowest annual pace due to higher interest rates from the Reserve Bank of Australia (RBA), as reported by Reuters. Households have trimmed spending on core goods led by the mounting burden of interest obligations fur to higher borrowing costs.

Earlier this week, RBA Governor Philip Lower unexpectedly hiked interest rates by 25 basis points (bps) to 3.85% while the street was expecting a continuation of a neutral policy. The RBA hiked its Official Cash Rate (OCR) despite the consistent softening of Australian inflation.

The US Dollar Index (DXY) has retreated after a poor recovery attempt to near 101.20. The USD index is expected to slip further below the crucial support of 101.00 amid rising concerns over US debt ceiling issue and banking jitters.

The White House has reported that a default on U.S. payment obligations due to the failure of the debt ceiling raise on time could result in the loss of 8.3 million jobs and a 6.1% reduction in economic output, as reported by Reuters.