Forex Trading Library

China is pulling Austalia’s economy

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On Wednesday, the AUD/USD flashed in a knee-jerk rally of around 30 pips, getting close to the 0.7050 handle and reaching towards 0.7000 as good data came out from the Chinese officials regarding their trade volume growth. The fairly positive release issued on the Chinese market calmed (in a certain amount) concerns about the external demand, improving also risk-sentiment and awakening the AUD bulls. China’s December trade report was a surprise across markets with the 382.05 billion Yuan surplus versus an expected 338.8 billion Yuan. The yearly exports rose 2.3% versus an expected 4.1% loss and a -3.7% recorded in November. As for the yearly imports, the decline wasn’t as large as expected: -4% versus a 7.9% decay expected and -5.6% previously recorded.

On Thursday, Australia published the employment figures for December, results coming in above what analysts predicted. According to the release made by the Australian Bureau of Statistics (ABS) the month of December recorded a decrease in total employment around 1K after the seasonal adjustments had been made, versus an expected -12.5K. The full-time job numbers came at 17.6K with a previous reading of 47.3K (revised) and part-time jobs jumped to -18.6K. The unemployment rate remained at 5.8% as previous, the participation rate going down to 65.1% from November’s 65.3%.

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In the UK, BoE’s (Bank of England) committee voted 8 against 1 for keeping interest rates at the 0.5% record low, in line with expectations. Ian McCafferty stood up for his beliefs and did not disappoint, voting against a 25 basis points rate hike. The MPC (Monetary Policy Committee) is responsible for setting up rates to reach the 2% inflation target in order to sustain economic growth and employment. A vote that passed was regarding the maintenance of a 375 billion pounds the stock of purchased assets financed by insurance in the central bank’s reserve. The actual rate path which the bank will follow in the future is going to be determined by the economic circumstances, a possible future hike – if to happen, will be made gradually.

Gold went down in the New York session yesterday as a result of US stocks going positive. The prices fell 0.6% hitting $1,080 per ounce at the moment of writing after the session closed with higher figures on Wednesday. The yellow metal’s price moved back and forth from risk aversion to belief, as news came into the market. The abiding concerns about global economic development favored the metal in the first trading days of 2016, the highest value registered being at $1,100 per ounce last week, before posting losses and arriving at today’s spot.

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