- The Australian Dollar is maintaining its upward momentum following the release of robust Trade Balance figures on Thursday.
- Data from the Australian Bureau of Statistics revealed a trade surplus of AUD 6.9 billion for March, significantly exceeding the anticipated AUD 3.13 billion.
- Optimism surrounding potential trade agreements with China was voiced by President Trump, further influencing market sentiment.
The Australian Dollar (AUD) is strengthening against the US Dollar (USD) on Thursday, with the AUD/USD exchange rate reflecting this appreciation in the wake of the latest Australian Trade Balance data. Market participants are now closely monitoring the forthcoming release of the Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) data from the United States (US), scheduled for release later in the North American trading session. This data will provide further insights into the health of the US manufacturing sector and potentially influence currency valuations.
The Australian Bureau of Statistics reported a substantial trade surplus of AUD 6.9 billion for March, a figure that markedly surpassed both the consensus forecast of AUD 3.13 billion and the revised February surplus of AUD 2.85 billion (revised downwards from an initial AUD 2.97 billion). This impressive performance was underpinned by a significant 7.6% expansion in exports, coupled with a 2.2% contraction in imports during the month. The surge in exports indicates strong external demand for Australian goods and services, while the decline in imports suggests a potential shift in domestic consumption patterns.
Earlier in the week, on Wednesday, the Australian Bureau of Statistics (ABS) also released Consumer Price Index (CPI) data, which showed a 0.9% quarter-over-quarter increase for the first quarter of 2025. This represents an acceleration from the 0.2% rise recorded in the fourth quarter of 2024 and exceeded market expectations, which had anticipated a 0.8% increase. On an annualized basis, the CPI registered a 2.4% gain in the first quarter, surpassing the projected 2.2%. These inflation figures are closely watched by the Reserve Bank of Australia (RBA) as they consider future monetary policy decisions. Sustained inflationary pressure could prompt the RBA to consider raising interest rates in order to maintain price stability, which could further bolster the Australian Dollar.
