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AUD responds to record trade data

AUD responds to record trade data

(12 February 2019 - Australia) A record streak of monthly trade surpluses failed to prevent the Australian Dollar from weakening. 

The Australian Bureau of Statistics (ABS) reported a seasonally adjusted surplus for December 2017 of over A$3.6 billion. This is the second largest trade surplus behind the record December 2016 high of A$4.5 billion.

For the first time in ABS reporting, in 2018 Australia delivered a trade surplus every month underpinned predominantly by increasing volumes of raw materials and resources exports. In the year to December 2018, the monthly value of exports was up 16 percent to A$38 billion, while imports rose by only 3.6 percent to A$34 billion. The ABS also released household and business lending data, revealing that the value of lending commitments to businesses fell 2.5 percent in December 2018, but is up 3.1 percent from December 2017.

Business confidence and the Australian Dollar will be tested by ongoing trade war disputes coming to head between the US and China. Any weakness in Chinese economic growth would flow directly through to 2019 monthly trade data and the Australian dollar. The Australian Dollar was pressured heavily in the lead up to latest trade war negotiation announcement yet gained over the weekend to sit at A$0.72 against the US Dollar as the deadline for tariff increases was deferred beyond the original 1 March deadline.

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