The Aussie declined against the US dollar in the Asian session Wednesday following the lower-than-anticipated consumer price index.
However, the currency regained the lost ground in the US session following the wider than anticipated US trade deficit and a steep rise in the wholesale inventories. In the last 24 hours, the AUD/USD pair remained range-bound between 0.7725 and 0.7770.
According to the data published by the Australian Bureau of Statistics (ABS), the consumer price index increased 0.6% q-o-q in the March quarter, compared with a 0.9% rise in the previous quarter. The reported figure missed the consensus estimate calling for a 0.9% growth in CPI for the reported period.
On a y-o-y basis, the CPI increased 1.1% in the March quarter. An 8.7% rise led to an increase in the price of automotive fuel. It was partly negative by a 3% drop in furniture.
In a separate news release, the ABS stated that the goods trade surplus increased to A$8.496 billion in March, from A$7.54 billion in the earlier month. Exports of goods rose by A$4.599 billion (or 15%) to A$36.246 billion in March. Imports of goods increased A$3.643 billion (or 15%) to A$27.749 billion.
Export of metalliferous ores increased $2.755 billion (or 20%) to hit A$16.402 billion. Specifically, iron ore and copper increased 21% and 62%, respectively. Iron ore represented 39% of overall goods exports in March.
At A$745 million, copper ore posted its third-highest export value on record. Notably, for the second successive month, Australian copper ore was traded for over A$4.50 per kg.
Export of gas rose by A$493 million (18%). The increase was driven by a A$326 million (12%) rise in liquefied natural gas export. Export of oilseeds increased by A$366 million (225%).
In particular, Canola exports increased to A$510 million, from A$354 million, surpassing the export record registered in April 2013. On the downside, the export of non-monetary gold fell by 27%, or A$703 million.
Compared with March 2020, exports rose by $703 million (2%) in March 2021. The increase was led by a 40% ($4.724 million) rise in metalliferous ores and an 85% ($542 million) increase in cereals.
The increase was negated by a 47% (A$1.664 million) decline in the export of non-monetary gold. While coal posted a drop of 29% (A$1.408 million), gas recorded a 30% (A$1.376 million) decrease.
In the US session, the Census Bureau stated that the goods trade deficit widened to $90.60 billion in March, from $87.10 billion in the prior month, and missed the $88.20 billion deficit anticipated by economists.
Preliminary data provided by the Census Bureau also indicated that wholesale inventories increased 1.4% m-o-m in March, following a rise of 0.6% in the prior month. Economists had anticipated a decrease in wholesale inventories by 0.5%.
Wholesale inventories of non-durable goods increased 1.6% in March, following an increase of 1.2% in February. Durable goods inventories rose by 1.2% in March, following a 0.6% rise in the previous month. On a y-o-y basis, wholesale inventories increased 4.5% in March.
According to the Energy Information Administration, crude oil inventories crude oil inventories increased by 0.10 million barrels in the week ended April 24, 2020, following an increase of 0.60 million barrels in the last week, and missed the 0.90 million barrel decline anticipated by economists.
Barring strategic reserves, the US crude oil inventories were 493.10 million barrels, matching the five-year average for the comparable period.
The weak economic data from both the US and Australia is expected to keep the AUD/USD pair range-bound with a slight bullish bias.
Technically, the AUD/USD pair is rising after testing the support at 0.7735. the next resistance is anticipated only near 0.7810. Additionally, the stochastics oscillator is out of the bearish 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.
