China’s July Trade Balance: Surplus widens more than expected to $112.5 billion

Sagar Dua FXStreet

China's Trade Balance for July, in US Dollar (USD) terms, arrives at $112.5 billion, higher than the $107.0 billion expected, but lower than the prior release of 125.62 billion.

Exports surge 23.9% year-over-year (YoY) in July from a 27% increase seen in June. The country’s imports surge 27.5% YoY in the same period vs. 36% recorded previously.

In Chinese Yuan (CNY) terms, the Trade Surplus widened by 767 billion, more than the 740 billion estimate, but lower than the previous release of 859.05 billion. Exports (CNY) grew at a moderate pace of 17.8% against the previous reading of 20.8%.

Market reaction

No immediate reaction is seen in the Australian Dollar (AUD), the liquid proxy of the Chinese economy, following the China Trade Balance data release. At press time, AUD/USD trades 0.1% lower to near 0.7024.

Economic Indicator

Trade Balance CNY

The Trade Balance released by the General Administration of Customs of the People’s Republic of China is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the CNY. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market. In general, a high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.

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