China Trade Data: Mixed Signals Impact AUD/USD & German Industrial Production

Summary

  • China’s trade surplus widens, exports increase, but imports fall
  • AUD/USD reacts to trade data by fluctuating
  • German industrial production and Eurozone GDP to influence demand outlook
  • US labor market stats may drive bets on a Fed rate cut

These mixed signals in China’s trade data and the subsequent reactions in currency pairs like AUD/USD could impact forex trading, particularly for those focusing on the Asian markets and commodities.

China Trade Data Delivered Mixed Signals

China’s US dollar trade surplus widened from $56.53 billion to $68.39 billion in November. Exports unexpectedly increased by 0.5% year-over-year. Economists forecast exports to decline by 1.1%. In October, exports were down 6.4%. However, imports fell by 0.6% after increasing by 3.0% in October. Economists forecast imports to rise by 3.3% in November.

While the pickup in exports signaled improving trade terms in November, import numbers disappointed. A marked reverse in imports suggested a sluggish demand outlook.

Australian trade data from earlier in the session delivered a similar demand layout. Falling imports countered rising exports, also suggesting a weaker demand outlook.

AUD/USD Reaction to the Trade Data

Before the trade data from China, the AUD/USD rose to a high of $0.65586 before falling to a low of $0.65318.

However, in response to the trade data, the AUD/USD climbed to a high of $0.65368 before dipping to a low of $0.65335.

On Thursday, the AUD/USD was down 0.22% to $0.65339.

071223 AUDUSD 3 Minute Chart

German Industrial Production to Influence Demand Outlook Sentiment

Later today, German industrial production and Eurozone GDP numbers need investor consideration. Improving production figures could ease concerns about the demand outlook.

Economists forecast industrial production to increase by 0.2% in October after falling 1.4% in September.

However, a larger-than-expected contraction in the Eurozone economy could sour the mood before the US session. According to second estimate numbers, the Eurozone economy contracted by 0.1% in Q3.

US Labor Market Stats to Drive Q2 2024 Fed Rate Cut Bets

The US labor market will be in focus again on Thursday. US jobless claims warrant investor attention. After weaker-than-expected ADP employment numbers, a spike in jobless claims would drive bets on a Q1 2024 Fed rate cut.

Economists forecast initial jobless claims to increase from 218k to 222k in the week ending December 2.

PIP Penguin
Logo