by Nicholas Cork
The Chinese trade data yesterday surprised the market with its weakness as both exports and imports plummeted, as a further indication that the policies adopted by the US are impacting the world’s 2nd largest economy enormously. Exports fell to 2 year lows and imports to 2 ½ year lows, with the import data a worrying reflection of weakening domestic demand. For the full-year 2018, China’s total trade surplus has fallen 16.2 per cent in 2018, but the trade surplus with the US has notably increased 17.2 per cent year-on-year. China has reportedly responded by downgrading their 2019 GDP to a 6% – 6.5% band, and will reportedly report 6.6% as the 2018 GDP number, the weakest since 1990.
The AUD has the wind taken out of its sails post data release and spent most of the session hovering around 72 cents where it stars our day today. Technically it appears overbought however 0.7150/0.7250 should contain it today ahead of the next UK Brexit vote, with the market likely not to punish the AUD to heavily if they do vote against, as expectations of an extension are being heavily factored in.
AUDUSD Daily Chart (Reuters)
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