Forex News
China's Trade Balance for December, in Chinese Yuan (CNY) terms, arrived at CNY808.80 billion, widening from the previous figure of CNY792.57 billion.
Exports climbed 5.2% YoY in December vs. 5.7% in November. The country’s imports rose 4.4% YoY in the same period vs. 1.7% recorded previously.
In US Dollar (USD) terms, China’s Trade Surplus expanded more than expected in December.
Trade Balance arrived at +114.10B versus +113.60B expected and +111.68B prior.
Exports (YoY): 6.6% vs. 3.0% expected and 5.9% last.
Imports (YoY): 5.7% vs. 0.9% expected and 1.9% previous.
Market reaction to China’s Trade Balance
AUD/USD extends gains around 0.6692 in an immediate reaction to the Chinese trade data. The pair is up 0.16% on the day, as of writing.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | -0.05% | 0.06% | 0.05% | -0.15% | -0.07% | 0.06% | |
| EUR | -0.01% | -0.05% | 0.04% | 0.03% | -0.16% | -0.08% | 0.05% | |
| GBP | 0.05% | 0.05% | 0.13% | 0.10% | -0.10% | -0.03% | 0.11% | |
| JPY | -0.06% | -0.04% | -0.13% | 0.00% | -0.20% | -0.12% | 0.02% | |
| CAD | -0.05% | -0.03% | -0.10% | -0.00% | -0.20% | -0.12% | 0.01% | |
| AUD | 0.15% | 0.16% | 0.10% | 0.20% | 0.20% | 0.08% | 0.21% | |
| NZD | 0.07% | 0.08% | 0.03% | 0.12% | 0.12% | -0.08% | 0.13% | |
| CHF | -0.06% | -0.05% | -0.11% | -0.02% | -0.01% | -0.21% | -0.13% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
This section was published on Wednesday at 00:52 GMT as a preview of China's Trade Balance data.
China’s Trade Balance Overview
The General Administration of Customs will publish its data for December on Wednesday at 03.00 GMT. Trade balance is expected to widen to $113.60B in December, compared to $111.68B in the previous reading. Exports are expected to rise by 3.0% YoY in December, while Imports are projected to increase by 0.9% YoY during the same period.
As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market.
How could the China’s Trade Balance affect AUD/USD?
AUD/USD trades on a positive note on the day in the lead up to China’s Trade Balance data. The pair edges lower as the US Dollar (USD) strengthens following data showing that Consumer Price Index (CPI) inflation data were largely as economists expected last month.
If data comes in better than expected, it could lift the Australian Dollar (AUD), with the first upside barrier seen at the January 12 high of 0.6722. The next resistance level emerges at the January 6 high of 0.6742, en route to the January 7 high of 0.6766.
To the downside, the January 9 low of 0.6663 will offer some comfort to buyers. Extended losses could see a drop to the December 4 low of 2025 at 0.6614, followed by the 100-day EMA of 0.6587.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- USD/CAD rises as the US Dollar strengthens on expectations that the Fed will hold policy steady this month.
- US CPI rose 0.3% MoM in December 2025, matching expectations, while annual inflation held at 2.7%.
- The Canadian Dollar may gain as WTI rises after Trump halted talks with Iran amid ongoing protests.
USD/CAD remains stronger for the second successive session, trading around 1.3900 during the Asian hours on Wednesday. The pair advances as the US Dollar strengthens after US Consumer Price Index (CPI) broadly met expectations, reinforcing views that the Federal Reserve (Fed) will likely hold policy steady this month, even as underlying price pressures showed signs of easing.
US Consumer Price Index increased by 0.3% month-over-month in December 2025, matching market expectations and repeating the rise seen in September. The annual inflation remains at 2.7% increase as expected. Meanwhile, Core CPI, excluding food and energy, rose 0.2% in December, below market expectations, while annual core inflation held at 2.6%, matching a four-year low.
The data provided a clearer sign of easing inflation after earlier releases were skewed by shutdown effects. However, last Friday’s strong Nonfarm Payrolls report, a dip in the Unemployment Rate, and a solid four-week average ADP Employment Change point to a resilient labor market.
The upside of the USD/CAD pair could be restrained as the commodity-linked Canadian Dollar (CAD) may receive support from higher Oil prices. West Texas Intermediate (WTI) Oil price hovers near two-month highs, trading around $60.70 per barrel at the time of writing.
Crude Oil prices advanced after US President Donald Trump halted talks with Iranian officials until protests ease, while voicing support for demonstrators. Ongoing unrest in Iran, coupled with the risk of US involvement, threatens the country’s roughly 3.3 million bpd oil output. Trump also warned that nations continuing business with Iran would face a new 25% tariff, intensifying concerns over potential supply disruptions.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- AUD/USD struggles as the US Dollar strengthens, shrugging off softer US inflation data.
- China’s Trade Surplus is expected to $113.6B, with exports up 3.0% YoY and imports rising 0.9%.
- Australia’s dwelling approvals jumped 15.2% MoM to a near four-year high of 18,406 units in November 2025.
AUD/USD holds ground after registering modest losses in the previous session, trading around 0.6680 during the Asian hours on Wednesday. The pair may further weaken as the US Dollar (USD) advances despite the softer inflation in the United States (US), hinting that the Federal Reserve (Fed) could indeed reduce interest rates as priced in by the financial markets.
US Core Consumer Price Index (CPI), excluding food and energy, rose 0.2% in December, below market expectations, while annual core inflation held at 2.6%, matching a four-year low. The data provided a clearer sign of easing inflation after earlier releases were skewed by shutdown effects. However, last Friday’s strong Nonfarm Payrolls report, a dip in the Unemployment Rate, and a solid four-week average ADP Employment Change point to a resilient labor market.
However, the AUD/USD pair could gain ground as the Australian Dollar (AUD) may find support from rising expectations of further rate hikes by the Reserve Bank of Australia (RBA), following a solid rebound in Australia’s Building Permits data.
Seasonally adjusted approvals for total dwellings in Australia surged 15.2% month-on-month to a near four-year high of 18,406 units in November 2025, in line with the preliminary estimate. This marked a sharp reversal from the 6.1% decline in the previous month and represented the strongest monthly increase since May 2023.
Persistent strength in housing demand may raise concerns at the RBA, as it could slow progress toward easing inflationary pressures and reinforce expectations of a more restrictive policy stance. This is despite a moderation in November inflation, which remains above the central bank’s target.
Traders will likely observe the Trade Balance data for December later in the day from China, Australia’s close trading partner. Trade balance is expected to widen to $113.60B in December, compared to $111.68B in the previous reading. Exports are expected to rise by 3.0% YoY in December, while Imports are projected to increase by 0.9% YoY during the same period.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- GBP/USD edges lower to near 1.3425 in Wednesday’s early Asian session.
- The US CPI rose 2.7% YoY last month, the Labor Department's Bureau of Labor Statistics said.
- A dovish BoE tone could weigh on the Pound Sterling.
The GBP/USD pair trades in negative territory around 1.3425 during the Asian trading hours on Wednesday, pressured by renewed US Dollar (USD) demand. Traders brace for the US Retail Sales and Producer Price Index (PPI) data later on Wednesday.
The US Consumer Price Index (CPI) rose by 2.7% YoY in December, matching November’s increase, according to the US Bureau of Labor Statistics (BLS) reported on Tuesday. This figure aligned with the market consensus. Meanwhile, the core CPI, excluding fluctuating food and energy costs, increased by 2.6% YoY in December, versus November’s 2.7% rise. This reading came in softer than the 2.7% expected.
“The initial excitement sparked by a cooler-than-anticipated core CPI was short-lived,” said Jose Torres at Interactive Brokers. “The reversal was influenced, in part, by the report’s failure to pull forward the next expected rate reduction from June to April, as fixed-income watchers project Powell’s December cut will be his last at the helm.”
Renewed concerns over the Federal Reserve (Fed) independence could drag the Greenback lower. Fed Chair Jerome Powell said on Sunday that the Fed has received subpoenas from the Justice Department over statements he made to Congress last summer on cost overruns for a $2.5 billion building renovation project at the central bank's headquarters in Washington. Powell termed the threats a "pretext" for putting pressure on the Fed to lower interest rates.
However, a dovish stance from the BoE could undermine the Pound Sterling (GBP) against the USD. The Bank of England (BoE) cut its interest rate to 3.75% in the December policy meeting and is expected to implement further reduction in 2026 as inflation eases, though officials note future decisions will be "closer calls.” Many analysts believe the UK central bank will hold rates steady in February, with the next 0.25% cut most likely to occur in March or April this year.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- NZD/USD falls despite New Zealand’s November building permits rising 2.8% MoM, reversing October’s decline.
- China’s Trade Surplus is seen widening to $113.6B, with exports up 3.0% YoY and imports rising 0.9%.
- Softer US inflation suggests the Federal Reserve may cut interest rates as currently priced by markets.
NZD/USD extends its losses for the second successive day, trading around 0.5730 during the Asian hours on Wednesday. The pair depreciates as the New Zealand Dollar (NZD) faces challenges following the release of domestic seasonally adjusted Building Permits, which rose 2.8% month-over-month (MoM) in November 2025, reversing an upwardly revised 0.7% decline in October.
Traders will likely observe the Trade Balance data for December later in the day from China, New Zealand’s close trading partner. Trade balance is expected to widen to $113.60B in December, compared to $111.68B in the previous reading. Exports are expected to rise by 3.0% YoY in December, while Imports are projected to increase by 0.9% YoY during the same period.
The NZD/USD pair also loses ground as the US Dollar (USD) gains ground despite the latest inflation in the United States (US) being benign, hinting that the Federal Reserve could indeed reduce interest rates as priced in by the financial markets.
US Core Consumer Price Index (CPI), excluding food and energy, rose 0.2% in December, below market expectations, while annual core inflation held at 2.6%, matching a four-year low. The data provided a clearer sign of easing inflation after earlier releases were skewed by shutdown effects. However, last Friday’s strong Nonfarm Payrolls report, a dip in the Unemployment Rate, and a solid four-week average ADP Employment Change point to a resilient labor market.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
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