AUD/USD Slightly Weakens, Markets Digest China Trade Data and Energy Risks
The AUD/USD fell slightly on Tuesday (March 10) in Asia after two days of gains, holding around 0.7060. The weakening occurred as the Australian dollar traded limitedly following the release of China's trade balance.
China's trade surplus was recorded at US$213.62 billion in February, exceeding expectations of US$179.6 billion and higher than the previous US$114.1 billion. However, in yuan terms, the surplus fell to CNY 637.5 billion from CNY 808.8 billion in January, below expectations of CNY 950 billion, thus signaling mixed trade strength.
In Australia, Westpac consumer confidence rose 1.2% in March after falling 2.6% in the previous month, marking the first increase since November. Conversely, NAB business confidence fell to -1 in February from 4, the first negative reading since April last year, while business conditions remained at 7.
On the policy front, the AUD received support when the yield on the 10-year Australian government bond rose to around 5.0% on Monday—its highest level since July 2011—amid Middle East tensions that raised energy prices and rekindled inflation concerns. RBA Governor Michele Bullock last week reiterated that the central bank remains "vigilant" about the impact of the conflict on inflation expectations and is ready to raise interest rates if necessary.
Meanwhile, AUD/USD was also under pressure as the US dollar strengthened slightly after a sharp decline in the previous session, when safe-haven demand eased on hopes that the Iran conflict would quickly resolve. The market now awaits the release of US inflation data, including CPI and PCE, which have the potential to be key drivers of the dollar's direction and AUD/USD volatility in the coming sessions. (alg)
Source: Newsmaker.id
