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Higher Chinese Trade Balance Pushes AUD USD Exchange Rate to 8-Month High

Australian Dollar Exchange Rates

The Australian Dollar has risen significantly against the US Dollar today, posting a 0.7% rise thanks to strong trading data from China.

This highly supportive data has put the AUD USD exchange rate at 0.7730, the best rate since November 2016.

Australian Dollar Surges on Strong Chinese Stats, Fed Caution

The Australian Dollar has appreciated sharply against the US Dollar, in the wake of Chinese and US domestic data.

In the former case, China has recently posted a rise in the June trade surplus along with increased lending during the same month. These figures have raised trader optimism about the Chinese economy and indirectly pushed up the Australian Dollar, given that China is Australia’s biggest trade partner.

Less impactful Australian news has covered consumer inflation expectations in July. Consumers predict higher prices going ahead, with this month bringing a 4.4% estimate.

US Dollar Slips as Fed Chair Points to Slower Interest Rate Hike Rate

From the US, the latest high-impact data has been testimony from Federal Reserve Chair Janet Yellen.

Speaking in congress, Yellen made statements that had a mixed reception. In brief, Yellen said that US interest rates could continue to rise at moderate pace in the future, but that there wasn’t much further to go until the ‘neutral level’ was reached.

This level would be the point at which further interest rate hikes would cease to have a noticeable impact on national spending and investment.

Although the short-term implication was that interest rates would keep rising, traders were more concerned with the latter half of this forecast which lowered the US Dollar’s value.

AUD USD Forecast: Further Australian Dollar Gains Possible if US Inflation Drops

The next Australian data isn’t out until the coming Tuesday, when the Reserve Bank of Australia (RBA) minutes for July will be announced. These could push the Australian Dollar up if they point to a future tightening of monetary policy.

More imminently, US inflation, retail sales and consumer confidence figures are due on Friday.

Inflation is forecast to fall annually in June, while retail sales are projected to rise slightly on the month. For the University of Michigan confidence index, a marginal decline is predicted.

Falling inflation was something warned against by Yellen, so it is possible that the US Dollar could tumble if the inflation rate slows. This could improve the AUD USD exchange rate.

Recent Interbank AUD USD Exchange Rates

At the time of writing, the Australian Dollar to US Dollar (AUD USD) exchange rate was trading at 0.7720 and the US Dollar to Australian Dollar (USD AUD) exchange rate was trading at 1.2952.