When is Australian Trade Balance and how could it affect AUD/USD?

Early Thursday morning in Asia, at 00:30 GMT, markets will see Australia’s December month Trade Balance numbers. Although tussles between Australia and China seem to have recently faded, as well as Goods Trade Balance suggested improvement in figures, latest dovish statements from the RBA and its Governor Philip Lowe increase the importance of today’s data for AUD/USD traders.

That said, the headline Trade Balance rose to 5022M in November while details marked Imports and Exports as having 10.0% and +3.0% respective figures for the stated month.

The trade numbers from an export-oriented economy become additionally important amid recent chatters that Australia is diverting goods towards Britain after an earlier spat with Beijing.

Ahead of the event, Westpac said,

Australia’s December trade balance will see the surplus snapback, to a forecast $7.7bn (median $8.8bn). Imports are expected to be flat, while exports finished the year with a flourish, up a forecast 7.5%. We have already seen the unadjusted data on goods, with export growth driven by iron ore and wheat.

TD Securities also suggest upbeat prints while saying,

Total trade surplus for Dec should come in around +A$9bn in Dec, higher than the A$5b trade surplus in Nov on the back of strong exports for iron ores, coal and wheat seen in the prelim Dec merchandise trade data. Services trade is likely to remain soft given that tight border restrictions remain which will hinder recreational travel and education-related travel services trade.

How could they affect AUD/USD?

With the recent risk-on mood favoring the AUD/USD buyers, strong data can extend the corrective pullback from Tuesday’s low of 0.7562. However, the upside momentum may not sustain as the latest hints from the RBA weigh on the quote. On the contrary, downbeat figures should recall the sellers targeting the five-week low marked before a few days.

Technically, AUD/USD buyers’ return from 50-day EMA, currently around 0.7595, buyers jostle with the one-week-old resistance line. Also acting as an extra upside filter is the 0.7640-45 area including multiple stops marked since December 17. Hence, the quote has more upside barriers while nearing the key support.

Keynotes

AUD/USD: Range bound above 0.7600, Aussie Trade Balance in focus

AUD/USD Forecast: Modest bounce, still at risk of falling

About Australian Trade Balance

The trade balance released by the Australian Bureau of Statistics is the difference in the value of its imports and exports of Australian goods. Export data can give an important reflection of Australian growth, while imports provide an indication of domestic demand. Trade Balance gives an early indication of the net export performance. If a steady demand in exchange for Australian exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.