- The Aussie dollar fails to pick up a bid despite the rise in China’s copper and iron ore imports.
- China’s trade surplus with the US hit a record high in September and that could boost fears of a further escalation of the trade war and hurt the Aussie dollar.
The AUD/USD continues to trade in a sideways manner around 0.7121, having turned a blind eye towards upbeat China data.
China’s unwrought copper imports rose to 521,000 tonnes in September – highest since March 2016. Meanwhile, iron ore imports increased 4.2 percent to a four-month high of 93.08 million tonnes in September.
Meanwhile, China’s trade surplus to CNY 213.23 billion in September, beating the estimated print of CNY 136.2 billion by a big margin.
Both copper and iron ore are Australia’s top exports and rise in the Chinese imports of these commodities is good news for the AUD. Further, a surge in China’s trade surplus indicates that the second-largest economy is holding strong despite the rising trade tensions.
Still, the Aussie dollar isn’t impressed, possibly because China’s trade surplus with the US hit a record high of $34.13 billion in September. That may embolden the Trump administration to impose a fresh round of tariffs on China.
AUD/USD Technical levels
Resistance: 0.7131 (session high), 0.7148 (38.2% Fib R of the recent drop), 0.7202 (Aug. 15 low)
Support: 0.7085 (Sept. 11 low), 0.7041 (Oct. 8 low), 0.70 (psychological level)
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