AUD/USD Forecast: Australian Dollar Falls After Weak China Trade Data
The Australian dollar (AUD) dropped against the U.S. dollar (USD) on Monday after new China trade data showed weaker-than-expected results. China’s trade surplus fell from CNY 743.6 billion in May to CNY 586 billion in June. While exports grew by 7.2%, imports only rose by 2.3%, signaling weaker domestic demand. Since China is a major trade partner for Australia, these results affected the AUD badly.
At the same time, the U.S. dollar stayed strong, supported by growing expectations that the Federal Reserve (Fed) might delay cutting interest rates. This added more pressure on the AUD/USD pair, pulling it further down.
On a positive note, Australian mining company BHP signed a deal with China’s CATL to work on new energy solutions, battery tech, and recycling. This partnership could help boost long-term sentiment around Australia’s resource sector.
Back in Australia, the Reserve Bank of Australia (RBA) is expected to keep interest rates steady in its August meeting. However, the RBA has warned about risks from rising wages and low productivity, which could keep inflation high.
Impact:
Due to weaker China trade data and strong USD, AUD/USD could possibly remain under pressure. A better China recovery or a hawkish RBA tone might support the Aussie dollar in the near term.