The AUD/USD pair continued its downward trend on Tuesday, holding lower grounds near 0.6775. The pair extended its pullback from an intraday high, experiencing its first daily loss in seven. The decrease in value of the Australian dollar can be attributed to downbeat China trade numbers for April, as well as softer Aussie Retail Sales figures, amid sour sentiment.
China Trade Numbers Impact AUD/USD
China’s trade numbers for April were released on Tuesday, which showed a weaker than expected trade surplus of $42.85 billion, missing the expectations of $48.5 billion. This was due to a 10.3% YoY increase in imports, a sign that the Chinese economy may be recovering from the pandemic. However, this also meant that China’s exports fell 2.7% YoY, which is a concern for the Australian economy, as China is Australia’s largest trading partner.
Soft Aussie Retail Sales Figures Impact AUD/USD
Australia’s retail sales figures for March were also released, showing a softer than expected growth of 1.3%, as opposed to the expected growth of 1.4%. This was a disappointing figure, as the retail sector is a crucial part of the Australian economy. The soft retail sales figures also highlight the concerns of low consumer sentiment in Australia, which could lead to a further decrease in the Australian dollar’s value.
Sentiment Sours AUD/USD
The sour sentiment regarding the Australian dollar is also a contributing factor to the downward trend of the AUD/USD pair. Investors are worried about the potential impact of the ongoing trade tensions between the US and China, which could have a negative effect on the Australian economy, due to its strong trade ties with China. The ongoing trade tensions between the two superpowers have also had an impact on global markets, which has added to the overall negative sentiment regarding the AUD/USD pair.
In conclusion, the AUD/USD pair has experienced a downward trend due to a combination of factors, including downbeat China trade numbers for April, softer Aussie Retail Sales figures, and sour sentiment. The decrease in value of the Australian dollar is a concern for the Australian economy, as it could lead to a decrease in foreign investment and impact the overall economic growth. It remains to be seen how the AUD/USD pair will perform in the coming days, as investors closely monitor the ongoing trade tensions between the US and China, as well as the global economic recovery.