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Blowout Chinese Trade Data Helps Send Aussie Through 1.0550

ByBoris Schlossberg
Published 01/10/2013, 05:27 AM
Updated 07/09/2023, 06:31 AM
AUD/USD
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NWSA
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Chinese Trade comes in strong

Chinese trade data handily beat expectations spurring a strong rally in risk assets in Asian session trade as it pushed AUD/USD through the key 1.0550 resistance level. Chinese Trade surplus increased to 31.6B versus 20.1B eyed as exports rose by a whopping 14.1% in the month of December.Imports grew by a more subdued rate of 6%.

The strong pick in Chinese trade numbers suggests that global demand remains more robust than the consensus view as consumers in both Europe and North America continue to spend despite economic and political problems in both regions. It may also reflect the growing importance of intra-Asian trade as China continues to expand its economic dominance of the region.

The surprisingly strong numbers helped boost demand for risk assets in Asia with region's equity markets responding positively to the news. In FX the Aussie was the prime beneficiary of investor optimism as the pair finally broke through the key 1.0550 resistance level in the wake of the news. The Aussie has been capped by concerns that demand from China may be slowing and recent spate of Australian domestic statistics confirmed a decline in economic activity. Today's data however, provides fresh hope that demand from China may revive as evidence by sharp rise in iron ore price since their lows in September.

The Aussie remains above the 1.0550 level in early European dealing and traders will now likely wait until the North American open to see if risk flow can lift the unit towards the psychologically key 1.0600 level. With little eco data on the docket trading may remain subdued until the Boe and ECB meetings later in the day.

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