Australian Dollar Stable After Economic Releases in Australia & China

The Australian dollar remained stable after macroeconomic releases in Australia as well as Australia’s biggest trading partner — China. The Aussie did not move far even though the data was very good and the general market sentiment was optimistic.
The Australian Bureau of Statistics reported that the seasonally adjusted trade balance logged a surplus of A$7,456 million in October — an increase from September’s value of A$5,815. Economists were not expecting any significant changes to the trade balance. Both imports and exports rose, by 1% and 5% respectively.
The Australian Industry Group/Housing Industry Association Australian Performance of Construction Index climbed from 52.7 in October to 55.3 in November. The report commented on the result:

The indices for house building activity and new orders reached new record highs in November, with house builders noting the success of government grants plus low interest rates in supporting demand for new houses and renovations. Builders in commercial and engineering construction said activity and forward orders are returning to a more ‘normal’ pace in Q4.

Group Head of Policy, Peter Burn, added further:

In part due to fiscal and monetary policy support, the construction sector is looking ready to play a major role in consolidating the general economic recovery into 2021.

The positive domestic macroeconomic reports coupled with good macro data in China should have bolstered the Australian currency. But the Aussie has failed to stage a rally despite the support. Among the possible reasons for the currency’s underperformance were straining relations between Australia and China. A trade spat with the Asian nation would be extremely detrimental to the Australian economy considering that China is Australia’s biggest trading partner.
AUD/USD was flat at 0.7420 as of 12:04 GMT today. EUR/AUD was trading at about 1.6339, near its opening level. AUD/JPY also did not move far, trading at 77.38. GBP/AUD was an exception, rising from 1.8009 to 1.8112.
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Original from: www.earnforex.com