Asian Session –China trade surplus lifts Australian dollar
February 12, 2014 8:08 am
Market focus was on strong trade data from China on Wednesday, which helped lift risk sentiment as the slowdown in growth in the second largest global economy was not as bad as feared.
China reported the widest trade surplus since January since 2009, as its exports beat expectations by far and rose 10.6% compared to a year earlier. Forecasts were for a mere 0.1% increase. Imports rose by 10%. The resulting trade surplus came in at $31.9 billion.
The upbeat data from China led to an appreciation of the Australian dollar, mainly because China is a major trade partner for Australia. Since China is one of the biggest consumers of commodities and Australia is a major exporter of raw materials, this would be beneficial for the Australian economy.
The aussie bounced from an Asian session low of 0.9006 to a one-month high of 0.9066 after being boosted by the Chinese data and ended the session with a 0.29% gain at 0.9062.
In other news, risk appetite was also held by Janet Yellen’s first Congressional testimony yesterday in which she reiterated the continuity of Fed tapering. Yellen said the Fed would continue with scaling back its bond buying program. The message of continuity in approach to monetary policy was taken positively by the markets.
The euro gained 0.05% against the dollar in Asia today to end at 1.3643 but staying below a two-week high of 1.3679 touched on Tuesday.
The pound gained 0.15% versus the dollar to 1.6472. Sterling direction will be subject to the Bank of England quarterly inflation report due later in the day. It is expected the report will signal that that interest rates will not rise until well into next year. This would likely be negative for the pound.
The dollar fell 0.17% against the yen to 102.46, easing back from yesterday’s post-Yellen high of 102.69. Focus now turns to US retail sales due on Thursday, which will be an important driver for the dollar.
Later in the European session today, ECB President Draghi will deliver a keynote address at a conference in Brussels today. Data to look forward to will be on Euro-zone industrial output, which is forecast to have declined by a seasonally adjusted 0.2% in December compared with a gain of 1.8% in the previous month.
Market focus was on strong trade data from China on Wednesday, which helped lift risk sentiment as the slowdown in growth in the second largest global economy was not as bad as feared.
China reported the widest trade surplus since January since 2009, as its exports beat expectations by far and rose 10.6% compared to a year earlier. Forecasts were for a mere 0.1% increase. Imports rose by 10%. The resulting trade surplus came in at $31.9 billion.
The upbeat data from China led to an appreciation of the Australian dollar, mainly because China is a major trade partner for Australia. Since China is one of the biggest consumers of commodities and Australia is a major exporter of raw materials, this would be beneficial for the Australian economy.
The aussie bounced from an Asian session low of 0.9006 to a one-month high of 0.9066 after being boosted by the Chinese data and ended the session with a 0.29% gain at 0.9062.
In other news, risk appetite was also held by Janet Yellen’s first Congressional testimony yesterday in which she reiterated the continuity of Fed tapering. Yellen said the Fed would continue with scaling back its bond buying program. The message of continuity in approach to monetary policy was taken positively by the markets.
The euro gained 0.05% against the dollar in Asia today to end at 1.3643 but staying below a two-week high of 1.3679 touched on Tuesday.
The pound gained 0.15% versus the dollar to 1.6472. Sterling direction will be subject to the Bank of England quarterly inflation report due later in the day. It is expected the report will signal that that interest rates will not rise until well into next year. This would likely be negative for the pound.
The dollar fell 0.17% against the yen to 102.46, easing back from yesterday’s post-Yellen high of 102.69. Focus now turns to US retail sales due on Thursday, which will be an important driver for the dollar.
Later in the European session today, ECB President Draghi will deliver a keynote address at a conference in Brussels today. Data to look forward to will be on Euro-zone industrial output, which is forecast to have declined by a seasonally adjusted 0.2% in December compared with a gain of 1.8% in the previous month.
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