AUD/USD retains bid tone after China reports above-forecast exports

• AUD/USD keeps gains as China’s export growth beat estimates. 
• The trade surplus widened to CNY 516.8 billion in December from November’s CNY 507.1 billion.
• The pair remains vulnerable to a rise in Treasury yields. 

AUD/USD continues to draw bids following the release of better-than-expected China exports data for December. 

Outbound shipments or Exports in yuan terms jumped 10.9% year-on-year in December, beating the projection of 7.1% growth by a big margin. Exports grew by 14.9% in November. Consecutive monthly increases in exports point to a recovery in global demand and are positive news for the AUD and risk assets in general. 

So far, however, the AUD/USD pair has failed to extend gains seen ahead of China data. The pair remains bid at session highs near 0.7750, representing a 0.27% rise on the day. 

The gains may be trimmed or erased if the stock markets in Asia and other parts drop in response to China’s dismal imports, a gauge of domestic demand. Inbound shipments or imports fell by 0.2% in December following November’s 0.8% contraction. 

Bearish pressure may also stem from a renewed rise in Treasury yields if any. That possibility cannot be ruled out, as the US President-elect is expected to announce an additional fiscal package on Thursday. The US 10-year yield is currently hovering near 1.08%, having hit a 10-month high of 1.18% earlier this week. 

Technical levels