Australia’s biggest trading partner China has released good data helping the Aussie strengthen across the afternoon. Australia exports over 20% of all their products to China so positive data has a knock on effect. China imports are up 20% from this time last year along with exports which were expected to be up 3.2% however were revealed to actually be up 16.4%.
China have had constructive trade talks with the US and this could have a detrimental effect on the Australian Dollar. If Trump encourages China to start purchasing goods from the US to reduce the deficit that could become direct competition to the Australians.
Australia’s employment figures today showed there are considerably more and more people moving into work. There is currently concern in Australia that they have a saturated market and a shortage of skilled workers. However the more people in employment the theory is the stronger the economy will become through tax and spending.
AUD next week
The GBP/AUD was on the rise at the start of the week however since the data releases today the rate has taken a turn. In my opinion the rate could continue to steadily rise especially if there is uncertainty investors will move their money from the AUD. Unless there is a major change in the next few weeks I would not be surprised to see the GBP/AUD rate back above the 1.70 level.