- Aussie drops after trade deficit widens to biggest in 6 months
- Disappointing data followed upbeat economic releases prior
- Australian bond yields hint atrebuilding RBA rate cut bets
Losing Money Trading Forex? This Might Be Why.
The Australian Dollar fell against its US counterpart after the former nation’s Trade Balance figures crossed the wires. The data showed that the country’s trade deficit widenedA$ 3305 million in October, missing the –A$ 2600 million consensus. In addition, imports remained little changed from September while exports declined about 3 percent.
The data release appeared to fuel RBA rate cut bets. Looking at Australian front-end government bond yields, they declined with the Aussie after the release. In its most recent monetary policy statement, the Reserve Bank of Australia maintained a familiar data-dependent monetary policy outlook.
Perhaps the shock factor in today’s Trade Balance figures came from the decline in exports. A couple of days ago, the country reported that exports added 1.5 percent to the nation’s GDP in the third quarter. This bodes well for the Aussie because a large part of Australia’s revenue derives from exporting to its top trading partner, China. With exports falling in October, this presents a counter balance to the recent positive news flow.