Australian Dollar Recovers from Recent Losses as US Dollar Depreciates Ahead of Fed Decision
The Australian Dollar (AUD) strengthened following the release of China’s Trade Balance data on Thursday. However, the AUD came under downward pressure against the US Dollar (USD) following the earlier Australian Trade Balance data during Asian hours. Downside risks for the AUD/USD pair seem likely as the US Dollar (USD) may strengthen further on market optimism following former President Donald Trump’s victory in the US election.
China’s trade volume expanded in October, reaching $95.27 billion year-on-year, beating the estimate of $75.1 billion and the previous $81.71 billion. Exports rose by 12.7% YoY, well above the estimate of a 5.0% increase and the previous 2.4% growth. Meanwhile, imports fell by 2.3% year-on-year, beating the estimate of a 1.5% decline and in contrast to the previous 0.3% increase.
Australia’s trade surplus fell to 4.609 million in September, down from the 5.300 million expected and August’s 5.284 million, the Australian Bureau of Statistics reported on Thursday. It was the smallest trade surplus since March, driven by a bigger drop in exports than imports.
Traders are anticipating the US Federal Reserve (Fed) to cut interest rates by 25 basis points at its November meeting on Thursday. The CME FedWatch Tool shows a 98.1% probability that the Fed will make a quarter-point rate cut in November, indicating a strong market consensus for a modest cut this week.
Source: FXStreet
