AUD/USD surrenders 0.6700 on downbeat China’s Trade Balance data

The AUD/USD pair has sensed selling pressure and has dropped below 0.6700 again as China’s National Bureau of Statistics has reported weaker-than-projected Trade Balance data. In US Dollar terms, Exports have fallen by 8.6% vs. the consensus of 3.5%, and Imports have tumbled by 10.6% against the projections of 6.0%. China’s Trade Balance has slipped sharply to $69.84B in comparison with the estimates of $78.1B.

Earlier, the AUD/USD pair scrolled above the round-level resistance of 0.6700 after the Australian economy reported weak Gross Domestic Product (GDP) data. The annual GDP data landed at 5.9%, lower than the expectations of 6.3% and the prior release of 3.6%. While quarterly GDP data dropped to 0.6% vs. the projections of 0.7% and the former release of 0.9%.

A slowdown in the Australian economy is expected to cheer the Reserve Bank of Australia (RBA) as it is a sign of a forward decline in inflation. A lower growth rate indicates a decline in economic activities, which forces firms to trim the prices of goods and services.

It is worth noting that the RBA hiked its Official Cash Rate (OCR) by 25 basis points (bps) to 3.10% on Tuesday. This was the third consecutive 25 bps rate hike by RBA Governor Philip Lowe. The Australian central bank has shifted to minor rate hike culture to avoid financial risks to the economy.

Meanwhile, the risk-aversion theme has eased marginally as investors are shrugging off United States data-inspired pessimism in the global markets. The US Dollar Index (DXY) has slipped below the immediate support of 105.60. It would be early calling the minor correction in the US Dollar a reversal amid an absence of any potential positive trigger for the risk-sensitive currencies.