The Australian dollar is still feeling the pressure today after the disastrous trade numbers from China although a slight bounce in the Iron ore price lent the currency some temporary support.
At 7.00am (GMT) the Aussie dollar was trading at US78.88c virtually unchanged from US77.87c in yesterdays close.
Monday’s trade data out of China pushed the Australian dollar towards a new 6-year low with the figures coming in way below expectations raising concerns that the Chinese economy is headed for potential slowdown.
Chinese exports tumbled 14.6 per cent from a year ago in March, well below expectations of an 8.2% gain.
Imports also fell short of expectations although not as much as exports falling 12.3% from a year ago against a consensus of 11.3%
Think Forex senor markets analyst Matt Simpson said the data "caught the market by surprise” and may add more fuel to the fire that the RBA will cut rates further in the nearest future.
"The forecast trade balance was $US43.4 billion ($56.5 billion) and it came in at $US3.1 billion. That's a huge differential. It's the lowest since February 2014 when it was negative," he said.
"It was a dismal figure across the board. With China importing less and iron ore prices declining, it's [a] double whammy for the Australian economy. Traders are going to be betting on a rate cut further down the line from the RBA." He also added.
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