The Aussie gained ground against the greenback despite the release of weak building approval data in Australia. The US unemployment and trade balance data also missed estimates. However, as the market was focused on US economic data, the Aussie was able to gain ground against the greenback. Overall, the AUD/USD pair rallied from a low of 0.6560 to a high of 0.6620 in the past 24 hours.
According to the Australian Bureau of Statistics, the country’s building approvals fell by 1.90% m-o-m in February to 12,520 units, following a 2.50% decline in January and disappointing economists’ who were expecting a 3.30% increase.
Private sector dwellings, devoid of houses, declined 24.90% m-o-m in February to 3,771 units, following a 15.40% increase in January. However, private sector houses grew by 10.70% in the same period to 8,404 units, following a 9.90% decline in January.
The value of total residential buildings declined 16.80% m-o-m in February. This comprises a 19.10% decline in the value of a new residential building to A$5.79 billion and a 0.10% decrease in alterations and additions. The value of non-residential buildings declined by 16% m-o-m in February to A$4.09 billion, following an increase of 11.60% in January.
Overall, the value of total buildings approved declined by 16.50% m-o-m in February, following a 14.50% increase in January.
According to the US Department of Labor, the country’s unemployment claims rose to 221,000 in the week ending March 30, from 212,000 (upwardly revised from 210,000) in the previous week and higher than forecasts of 213,000.
The four-week moving average increased to 214,250, an increase from 211,500 (upwardly amended from 211,000) in the previous week.
According to the US Bureau of Economic Analysis, the country’s trade deficit widened to $68.90 billion in February from $67.60 billion in January, disappointing the market, which was expecting a narrowing of the trade deficit to $66.90 billion.
Exports stood at $263 billion in February, up $5.80 billion from January. Likewise, imports stood at $331.90 billion in February, an increase of $7.10 billion from the previous month.
Goods exports were $176.70 billion in February, an increase of $5 billion from January. The increase was led by industrial supplies and materials, which posted a growth of $2.90 billion. Food, feed, and beverage exports increased by $1.7 billion. Capital goods recorded a rise of $1.5 billion. However, automotive vehicle, parts, and engine exports fell by $1.3 billion.
Services exports rose by $0.8 billion to $86.4 billion in February.
Goods imports were $268.10 billion in February, reflecting an increase of $4.70 billion from January. Consumer goods imports rose by $1.60 billion. Likewise, food, feed, and beverage imports grew by $1.30 billion. Also, automotive vehicle, parts, and engine imports increased by $1.1 billion.
Services imports grew by $2.4 billion to $63.8 billion in February.
The weak economic data is expected to keep the AUD/USD pair range bound in the near term.
The historical price chart indicates that the AUD/USD pair is ascending after testing the support at 0.6490. The next resistance is anticipated to be only near 0.6730. Additionally, the currency pair is trading above its 50-day moving average, while the stochastics indicator is in the bullish zone. Therefore, we anticipate the AUD/USD pair to remain in an uptrend in the near term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
