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China’s Trade Balance for July, in Chinese Yuan terms, came in at CNY601.98 billion, shrinking from the previous figure of CNY703.77 billion. Exports increased by 6.5% YoY in July vs. 10.7% seen in June. The country’s imports rebounded 6.6% YoY in the same period vs. -0.6% recorded previously. In US Dollar terms, China’s trade surplus shrank in July. Trade Balance came in at +84.65B versus +99B expected and +99.05B previous. Exports (YoY): 7.0% vs. 9.7% expected and 8.6% previous. Imports (YoY): 7.2% vs. 3.5% expected and -2.3% last. Additional takeaways China Jan-July USD-denominated exports +4.0% YoY. China Jan-July USD-denominated Imports +2.8% YoY. China July trade surplus with the US was $30.84 bln, vs $31.78 bln surplus in June. China Jan-July trade surplus with the US. +$190.64 bln. FX implications AUD/USD shrugs off the narrowing of China’s trade surplus. The pair is up 0.51% on the day, trading at 0.6552, at the time of writing. Australian Dollar FAQs One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of…

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Filed under: News - @ August 7, 2024 6:16 am