"The outlook for Australia's mineral and energy exports remains positive"
-Bureau of Resources and Energy Economics
The Oz trade balance worsened more than initially was expected in August, as demand for raw materials from Asian countries remained robust, even though mining companies benefited from falling Aussie that boosted the total value of commodity shipments. Australian government reported the resource-rich country posted a trade gap of 815 million Australian dollars, almost twice less than a month earlier, however, double the figure expected by analysts. The improvement was led by a 3% increase in exports, which offset a 1% jump in imports driven by stronger demand for food and beverages from overseas markets. A steep decline in Aussie and rising demand for Australian resources are providing additional boost for the struggling economy. The Aussie lost about 10% of its value since April and is now trading well below parity with greenback, giving a kick to the earning of commodity companies, which are producing iron ore, coal and other raw material that are prices in the U.S. dollars. At the same time, the Bureau of Resources and Energy Economics in its quarterly report said that Australian resource exports, which account for around two-thirds of total goods and service exports, will jump 11% to $203.4 billion Australian dollars this financial year. While capital investment in mining projects is waning and the government is looking for other measures to stimulate the economy, the volume of key resources is still set to rise in order to meet growing demand for commodities.
© Dukascopy Bank SA