Australia: Trade surplus hits record high on higher iron ore price - Westpac
Andrew Hanlan, analyst at Westpac, notes that the Australia’s trade surplus climbed to a record high of $4.8bn in February, up from $4.35bn in January, eclipsing the previous record of $4.6bn in December 2016.
Key Quotes
“The February result exceeded expectations (market median $3.7bn and Westpac $3.8bn).”
“Imports surprised to the low side, declining by 1.1%, whereas we anticipate a rise of 1.1%. A drop in fuels was the source of weakness.”
“Exports provided an upside surprise, increasing by 0.2% vs a forecast decline of 0.9%. Notably, the expected pull-back in gold failed to materialise.”
“More fundamentally, a key dynamic driving a widening of the trade surplus is the boost to export earnings from higher commodity prices, notably for iron ore and coal. “
“Total exports in February are 13.2% above the level of a year ago, outstripping a 4.4% rise in imports.”
“The trade surplus in the March quarter to date is running at $4.6bn a month, well up from $2.9bn per month in the December quarter. The bulk of this improvement likely reflects higher commodity prices.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
