Forex Marketz Daily Forex News – Fully Markets Update
This morning has been a busy morning for the economic docket in the Asian and Pacific Rim trade hours. Just released, moments ago, Australian trade data showing a sowing down of exports.
The Australian dollar (AUD/USD) softened against most of its G 20 trade partners in the Forex universe, after June’s Australian trade data release, in Australian dollar terms (AUD), showed that exports weakened. The financial markets were looking for a surplus of AUD$1800 million. Instead, they got a far smaller AUD$856 million.
Also, today’s trade data showed that the island nation’s exports fell one percent. What was most worryingly, the net value of goods sold to China, which just happens to be Australia’s largest trading partner, especially for raw materials, fell to a lowest level so far this year.
Australian Trade is a big chunk of the country’s GDP
This is worrying for economic growth and future gross domestic product (GDP) numbers. International trade accounts for about one-fifth of Australian GDP. SA sluggish print on this front, as seen this morning with this tepid print of the trade data, can undermine overall economic growth. This will reduce inflation, thereby hurting the case for a rate hike from the Reserve Bank of Australia (RBA).
After the data crossed the news wires, front end two year government bond yields fell. The local currency tracked the yields lower. This fall in rates, also suggested a dovish shift, in investor sentiment, and priced in tightening prospects.
