Search ForexCrunch
  • AUD/USD trades near 0.78, having hit a multi-year high of 0.7820 in the overnight trade. 
  • Australia’s trade surplus narrowed more-than-expected in November. 
  • That, coupled with the US-China tensions could draw offers for the AUD.

A narrowing of Australia’s trade surplus or excess of exports over imports in November is failing to move the needle in the Aussie pairs. The data released soon before press time has not impacted AUD/USD, leading the pair unaffected around 0.78. The currency pair hit a high of 0.7820 during the overnight trade.  

Australia’s trade surplus narrowed to A$ 5,022 million in November from October’s $7,456 million and missed the projection of A$ 6,200 million. Exports or outbound shipments rose 3% month-on-month, and imports rose by 10%. Meanwhile, Building Permits increased by 2.6% month-on-month in November, beating the estimate of 2.5% following October’s 3.8% rise. The not-so-impressive data set could become the reason for a pullback in the Aussie dollar, which has charted an impressive rally from 0.69 to 0.78 over the last two months. 

The broader picture remains in favor of the bulls. With a majority secured in the Senate, the US Democrats now have control over what legislation will pass through Congress. As such, expectations of large fiscal stimulus could keep the risk assets better bid. 

However, fears of increased regulation, tax hikes, overnight chaos in the US capitol, and US-China tensions could keep gains in the AUD and other risk assets under check in the short-term. According to the Wall Steet Journal (WSJ), US officials are reportedly considering prohibiting Americans from investing in Alibaba and Tencent Holdings. The move comes following the US President Donald Trump’s decision to ban transactions with 8 Chinese software applications and NYSE’s decision to delist Chinese telecommunications companies included in a ban on investment in Chinese firms with links to the Chinese military.

Technical levels