The Aussie rallied against the greenback yesterday following the release of overwhelmingly positive trade surplus data for May. On the contrary, the US unemployment claims data reflected a six-month high level. Overall, the AUD/USD pair rallied from a low of 0.6760 to a high of 0.6860 in the past 24 hours.
According to the Australian Bureau of Statistics, the trade surplus increased to A$15.97 billion in May, from A$13.25 billion in the prior month, and delighted economists who were anticipating a decrease in the trade surplus to A$10.70 billion.
Goods and services exports grew 9.50% (or A$5.054 billion) to A$58.402 billion, led by an increase in exports of coal, coke, briquettes, and other mineral fuels.
Goods and services imports increased 5.80% (or A$2.337 billion) to A$42.437 billion, led by a growth in fuels and lubricants and non-industrial transport equipment.
In the US session, the Department of Labor stated that the first-time unemployment claims inched higher to 235,000 in the week ended July 2, from 231,000 in the earlier week, and disappointed economists who were anticipating a drop in the jobless claims to 230,000.
The four-week average was 232,500, up 750 from the prior week’s average of 231,750.
As per the data published by the US Bureau of Economic Analysis, the goods and trade deficit narrowed to $85.50 billion in May, from $86.70 billion in the prior month, but missed the $85 billion trade deficit anticipated by economists.
Exports were $255.90 billion in May, an increase of $3 billion from April. Likewise, imports increased by $1.90 billion m-o-m to $341.40 billion in May. The narrowing of the trade deficit was aided by a $2.90 billion decline in the goods trade deficit to $105 billion. However, the services surplus fell by $1.70 billion to $19.40 billion.
Specifically, exports of goods rose by $3 billion to $179 billion in May. Industrial supplies and materials recorded an increase of $3.30 billion. Consumer goods rose by $0.60 billion. Foods, feeds, and beverages fell by $1.60 billion. Services exports inched up $0.10 billion to $76.90 billion in May.
During the same period, imports of goods rose by $0.10 billion to $284 billion. Industrial supplies and materials grew by $1.80 billion. Consumer goods declined by $1.50 billion. Imports of services increased by $1.80 billion to $57.50 billion.
In the year-to-date, the goods and services deficit grew by 38.40% (or $126.50 billion), compared with the similar period last year.
The solid trade surplus data is expected to keep the AUD/USD pair range-bound with a slight bullish bias in the near term.
The historical price chart indicates that the AUD/USD pair is rising after testing the support at 0.6760. The next resistance is anticipated only near 0.6890. Additionally, the currency pair is trading above its 50-day moving average while the MACD indicator is showing a positive reading. Therefore, we anticipate the currency pair to remain in an uptrend in the short 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.
