"Australia's annual exports to China totalled over $92 billion, so it will be truly staggering just how much income will be generated from our largest trading partner when all the major resource projects are operating at full capacity"
- Craig James, CommSec chief economist
The Australian Dollar started this year by performing a strong rally against its U.S. counterpart, however, after hitting a crucial level of 0.90 the pair pulled back and extended its decline on Tuesday, following a report from the Australian Bureau of Statistics. The official data showed the resource-rich economy logged its fifth straight monthly trade deficit, even though it came smaller than expected, as exports improved, while imports turned lower.
November trade deficit stood at $118 million, after a gap of $358 million a month earlier. The figure came below analysts' forecasts of a $300 million deficit. Shipments advanced by $94 million totalling $27.4 billion, on the back of higher non-rural goods exports, which added almost $93 million, while shipments of metal ores and minerals soared 4%. At the same time, imports sank 1% over the period, led by a 2% drop in the amount of imported consumption goods. Before the report the Westpac bank expressed their view, the data should have come better-then-expected as exporters benefited from weaker Aussie and stronger prices for bulk commodities. The Aussie has lost more than 3% versus the U.S. Dollar in November, pushing exporters earning higher and lifting the cost of imported goods and services.
© Dukascopy Bank SA