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Despite Positive GDP Figures, ‘Aussie’ Falls on Back of Shocking Trade Balance Data

Australian Dollar Exchange Rates

The Australian Dollar has held gains against many major currencies over the last month partly due to the myriad problems major world economies are experiencing. Barely saved from a technical recession on Wednesday the 1st of March when the Australian GDP figures miraculously ended on 1.1%, forecasted to be around 0.7%. This was substantially higher than -0.5% from the previous period. The market reacted with a 1% rise against the ‘Sterling’ and an array of other currencies.

Thursday painted quite a different picture; even though building approvals m/m came in strong at 1.8% all attention was on the shockingly poor trade balance result. These figures came in under forecast last month at 3.33B, this periods figures were due to be up to 3.82B, instead 1.30B was the final result which again upsets the confidence in the accuracy of forecasting and sent the AUD floundering against a basket of currencies.

Fear Permeating the Market Causes USD Rally

US Unemployment Claims came out positive yesterday which helped the USD, surprisingly though the ‘Greenback’ rose over 1% against the AUD overnight. Analysts believe this has a lot to do with Donald Trump’s recent Attorney General selection Jeff Sessions. Growing controversy surrounding Sessions and his possible political dealings with the Russians has caused the market to divest from riskier currencies which includes the AUD and NZD.

The USD was trading at 1.3057 on the 2nd of March, jumping up to 1.3221 and stabilising around the 1.3205 mark.

Looking forward for the AUD

A Big week ahead for the ‘Aussie’; Monday means Retail Sales and Tuesday spells the RBA Cash rate decision which is expected to remain at 1.5%.

Looking further ahead on the 15th of March the Federal Reserve is expected to raise interest rates, now with an 80% likelihood which is up from the previous 50% likelihood just under a week ago.

The AUD is currently trading at 0.7567 against the USD