Australian Trade Balance Less Than Expectations

Australian Trade Balance Actual 0.97B, Expected 1.10B Previous 0.42B

Release Explanation: The trade balance figure is simply the difference between the amount of export and imports of Australian goods and services for the reported month with Australia and other foreign trade partners. Subsequently, when exports are greater than imports, or positive net exports, a trade surplus is created. However, when imports are greater than exports, a deficit is created. Simply put, here, there is more money leaving the country than actually coming in. As a result, the report is taken into heavy consideration as it indicates flow of goods and services and stand as one of the biggest components of the Balance of Payments report.

Trade Desk Thoughts: Australia has posted a lower than expected trade balance for the month of January. In seasonally adjusted terms, the surplus was A$0.97 billion; this is a decrease from December's A$0.42 billion which was also revised lower, from A$0.59 billion. A majority of the exports in January were non-agricultural products, meanwhile, the countries imports were mostly normal goods.

Forex Technical Reaction: The Australian dollar weakened significantly in the minutes leading up to the release but then gained it back after the report was released. The pair is finding support slightly above the neutral pivot point.

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