The Aussie remained range-bound against the loonie yesterday following the release of weak economic data from both Canada and Australia. While Australia’s building approvals for March missed estimates, Canada’s trade balance unexpectedly swung to a deficit in the same period. Overall, the AUD/CAD pair traded in a range of 0.8903 to 0.8974 in the past 24 hours.
According to the Australian Bureau of Statistics, the country’s building approvals grew by 1.90% m-o-m in March to 12,947 units, following a decline of 0.90% in the previous month but missing forecasts of 3.50% growth.
The private sector house approvals grew by 3.80% m-o-m in March to 8,891 units. This follows a surge of 12.40% in February. Likewise, private dwellings, excluding houses, rebounded with an increase of 3.60% to 3,936 units after plunging 24.70% in February.
The value of new residential buildings grew by 8.30%. This comprises an 8.70% increase in new residential buildings and a 6.10% rise in alterations and additions. Notably, in actual figures, the value of new residential building approvals was A$6.35 billion.
The value of non-residential buildings jumped 28.70% m-o-m in March to A$5.28 billion, after a 16.80% decline in February. Overall, the value of total buildings approved grew by 15.90% m-o-m in March, following a 16.80% decline in February.
According to the Australian Bureau of Statistics, the country’s goods trade surplus declined to A$5.02 billion in March from A$6.59 billion in the previous month, missing forecasts of A$7.19 billion. Goods exports inched up 0.10% m-o-m in March to A$51 million. Likewise, goods imports rose by 4.20% m-o-m in March to A$1.62 billion.
According to Statistics Canada, the country’s trade balance swung to a deficit of C$2.30 billion in March from a surplus of C$476 million in February, missing forecasts of a C$1.10 billion surplus. The reported figure reflects the largest trade deficit since June 2023.
Canada’s goods exports fell by 5.30% m-o-m in March. Likewise, imports declined by 1.20% in the same period.
Exports of metal and non-metallic mineral products fell by 17.4% m-o-m in March. Similarly, exports of energy products fell by 4.90% in March. Motor vehicles and parts decreased by 6.30% m-o-m in March after increasing by 3.70% in February. Also, exports of farm, fishing, and intermediate food products dipped 9.20%.
Imports fell by 1.20% m-o-m in March after growing by 5.20% in February. Seven out of 11 product categories recorded a decline. Specifically, imports of electronic and electrical equipment and parts decreased by 8.10% in March, following an 11.30% rise in February.
Imports of metal ores and non-metallic minerals fell by 29.20% m-o-m in March to C$1.30 billion, reflecting the lowest level since September 2021.
Service exports fell by 2% to C$16.90 billion. At the same time, imports of services decreased by 1.40% to C$17.90 billion.
Overall, exports of goods and services fell by 4.60% to C$79.50 billion in March. Likewise, imports declined by 1.20% to C$82.70 billion. Therefore, Canada’s aggregate trade deficit widened to C$3.30 billion in March from C$431 in February.
The weak economic data from both countries is expected to keep the AUD/CAD pair range-bound in the near term.
Technically, the AUD/CAD pair is ascending after testing the support at 0.8910. The next resistance is anticipated to be only near 0.9060. Additionally, the currency pair is trading above its 50-day moving average, while the stochastic indicator is in the bullish zone. Therefore, we anticipate the AUD/CAD pair to remain in an uptrend for the next few trading sessions.
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.
