Forex - Aussie gains on China trade data, yen up on safe haven demand

Investing.com - The Aussie gained on Tuesday on signs China continues to post trade gains in the face of a slump in the global economy and weak overall prices in the commodity complex led by oil.

USD/JPY traded at 118.24, down 0.10%, after the data, while AUD/USD changed hands at 0.8178, up 0.26%. EUR/USD traded at 1.1841, up 0.07%.

China said December exports rose 9.9% in December in yuan terms, while imports fell 2.3% and the country posted a trade surplus of $49 billion.

In Japan markets re-opened after a Monday holiday. The first piece of data,December bank lending showed a gain of 2.7% year-on-year, compared to a 2.8% rise in the previous month. The November adjusted current account balance came in at a surplus of ¥910 billion.

Later in the day, the December Economy Watchers' Survey is due at 1400 (0500 GMT) followed by ESP Forecast Survey of economists on GDP, CPI, BOJ policy at 1500 (0600 GMT). The Watchers' index for Japan's current economic climate plunged to a 12-month low of 41.5 in November for the second straight monthly drop as the drag from the April sales tax hike continued to dampen the retail, restaurant and housing sectors.

Overnight, the dollar remained close to twelve-year highs against the other major currencies on Monday, as demand for the greenback after slipping in the wake of Friday’s U.S. jobs report, which indicated that the Federal Reserve could keep rates on hold for longer.

The U.S. economy added 252,000 jobs in December the Labor Department said Friday, more than the 240,000 forecast by economists. The unemployment rate ticked down to a six-and-a-half year low 5.6%.

But average earnings fell by 0.2% last month and were up by only 1.7% from a year earlier.

The report prompted markets to push back expectations for the first hike in U.S. interest rates to late-2015.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.07% to 92.19.

Over the weekend, the governor of the Italy’s central bank warned that the euro zone is at risk of further deflation and said the best way to combat that threat is through purchasing government bonds.