China has been a source of weakness for the Australian dollar, but it can also provide the fuel for a recovery. Trade balance in the world’s second largest economy came out at a surplus of $51.3, still positive. More importantly, imports and exports dropped less than expected.
Together with yet another day of hardly any moves in the pressured Chinese yuan, AUD/USD was able to recapture 0.70. Will it last?
China reported a drop of only 1.4% in exports for the month of December, year over year, better than a big drop of 8% expected. Imports, some of them coming from Australia, slipped 7.6%. This doesn’t seem too positive, but it’s still better than -8.7% beforehand and -11.5% expected.
AUD/USD, that was already reaching down to the September double bottom of 0.6940 yesterday, extended its recovery and reached a peak of 0.7048, under resistance at 0.7065. However, this doesn’t seem to last too long, with the pair getting ever closer to 0.70 once again.
The next challenge for the Aussie comes from the home ground: Australian employment figures are next. See how to trade the Australian jobs report with AUD/USD.
