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Forex News

News source: FXStreet
Nov 09, 09:31 HKT
Breaking: China’s CPI inflation eases to 0.7% YoY in October, vs. 0.8% expected

China’s Consumer Price Index (CPI) climbed 0.7% in October from a year ago after arriving at a rise of 0.9% in September, the National Bureau of Statistics of China reported on Monday. The market consensus was for 0.8% in the reported period.

Chinese CPI inflation arrived at 0% MoM in October versus a rise of 0.2% prior, in line with the expectation.

China’s Producer Price Index (PPI) jumped 5.7% YoY in October, following a 5.0% increase in September. The data came in stronger the market consensus of 5.3%.

Market reaction to China’s CPI, PPI data

The mixed Chinese data fail to boost the China-proxy Australian Dollar (AUD). At the press time, the AUD/USD pair is up 0.36% on the day to trade at 0.6888. 

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.

Nov 09, 09:30 HKT
Euro advances on ECB rate hike expectations, weaker US Dollar
  • EUR/USD rises as strong ECB policymaker comments and 4% Eurozone inflation boost December rate hike prospects.
  • US Dollar declines despite high market expectations for a 25-basis-point US Federal Reserve rate increase.
  • Solid US employment data and upcoming inflation reports may limit further gains for the EUR/USD pair.

EUR/USD gains ground after two days of losses, trading around 1.1150 during Asian hours on Monday. The currency pair is appreciating as the Euro (EUR) gains support following statements from several European Central Bank (ECB) policymakers, including the heads of the German and Italian central banks, suggesting that a December interest rate increase may be likely.

Eurozone inflation rose to a three-year high of 4% in October, driven by higher energy costs, which adds to the case for further monetary tightening. ECB President Christine Lagarde noted on Thursday that the central bank is actively monitoring incoming data to determine whether a rate hike is warranted next month.

Additionally, the EUR/USD pair is climbing as the US Dollar (USD) declines even though the CME FedWatch tool indicates that the odds of another 25-basis-point rate hike at the December 8-9 Federal Open Market Committee (FOMC) meeting have risen to near 80%.

Meanwhile, stronger US jobs data could potentially lift the Greenback and act as a headwind for the pair. Nonfarm Payrolls (NFP) rose by 165,000 in October, surpassing the market consensus of 65,000 and improving from September's figure of 60,000, while the Unemployment Rate nudged down to 4.1% against a forecast of 4.2%. Looking ahead, investors will be closely watching Tuesday's US Consumer Price Index (CPI) report and Friday's Producer Price Index (PPI) for further signals regarding the Federal Reserve’s upcoming policy decisions.

Dollar fails to capitalize as yields and Fed expectations retreat

Strategists at ABN Amro observe that the Dollar has been unable to draw support from the latest bout of risk aversion, noting that "the USD struggled to benefit as US Treasury yields and Fed hike expectations fell." This aligns with broader market commentary that softer rate expectations are limiting upside for the Dollar even in a risk-off environment.

Euro FAQs

The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

Another significant data release for the Euro 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 then its currency will gain in value 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.

Nov 09, 08:48 HKT
WTI falls to near $89.50 as Trump hints at reduced US-Iran tension
  • WTI plunges as Trump called further strikes on Iran "highly unlikely" if progress is made on nuclear and shipping talks.
  • Iraq secured US agreements to resume oil exports through the Strait of Hormuz, offsetting $60 billion in losses.
  • Crude prices dropped despite Secretary of State Marco Rubio warning that Iran's current negotiation demands remain unacceptable.

West Texas Intermediate (WTI) oil price loses ground after remaining nearly flat in the previous day, trading around $89.60 during Asian hours on Monday. Crude oil prices fell following statements from US President Donald Trump indicating that further military strikes on Iran are "highly unlikely," provided there is significant progress in negotiations surrounding Iran's nuclear program and the reopening of the Strait of Hormuz. Trump also acknowledged that the unpopular Middle East conflict, which has driven up oil and gasoline prices, played a key role in the Republicans' historic defeat in the recent midterm elections.

Reuters reported that Trump said in a phone interview with CNN that any decision depends on whether Iran signs a strong agreement, noting that additional military action would likely be unnecessary. Despite earlier hints at renewing major attacks following the midterms, no large-scale US military operations have been launched, while Iran has warned it would respond to any future strikes by targeting US and Israeli assets.

Meanwhile, diplomatic efforts in the region show signs of progress. Iraqi Foreign Minister Fuad Hussein stated in an interview with Al Jazeera that Iraq has reached understandings with the United States to resume oil exports through the Strait of Hormuz via a shipping lane near Oman. Hussein highlighted the severe economic toll of the conflict, reporting that Iraq’s losses from the Iran war and oil export disruptions have reached $60 billion.

While oil prices plunged last week on expectations that Democrats would push for a swift end to the conflict, high-level skepticism remains. US Secretary of State Marco Rubio tempered expectations for an immediate breakthrough, describing Iran’s current negotiation demands as unacceptable.

WTI Oil FAQs

WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.

Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

Nov 09, 08:21 HKT
New Zealand Dollar holds gains above 0.5550 amid New Zealand election uncertainty
  • NZD/USD gains ground to around 0.5560 in Monday’s early Asian session.
  • New Zealand’s ruling coalition has a slim majority in preliminary election outcomes.
  • The US economy added jobs at a much stronger-than-expected pace in October.

The NZD/USD pair gathers strength near 0.5560 during the early Asian trading hours on Monday. Markets continue to assess central bank policies and the preliminary results of the New Zealand general election. China’s Consumer Price Index (CPI) inflation report will be released later in the day.

Preliminary results showed Prime Minister Christopher Luxon’s National-led coalition with a paper-thin majority. However, the gap between the competing political blocs remains so small that even a slight change in the final vote count could allow the left-wing opposition to form the next government.

Currently, New Zealand’s governing right-leaning bloc holds a narrow lead with 67 seats in an expanded 131-seat parliament. The country would need to wait until the Electoral Commission delivered the final official results on November 27 for certainty. Coalition negotiations could then drag on for weeks before a government is formed.

Stronger US jobs data could lift the Greenback and act as a headwind for the pair. The Nonfarm Payrolls (NFP) rose by 165,000 in October, compared to 60,000 in September. This figure came in above the market consensus of 65,000. The Unemployment Rate nudged down to 4.1% in October, compared with the forecast for 4.2%.

Traders increased the chance of another quarter percentage point hike when the Federal Open Market Committee (FOMC) meets December 8-9 to 79.6%, according to the CME FedWatch tool.

RBNZ surprise keeps focus on RBA as New Zealand diverges from Australia

Rabobank’s strategists highlight that “last week’s decision by the RBNZ to leave rates unchanged blindsided a market that was priced for a hike,” a move that has “led to some soul searching ahead of this week’s RBA decision.” The bank notes that at its policy meeting the RBNZ acknowledged that “annual inflation is expected to increase to 4.4% in the December quarter (largely on the back of fuel),” but stressed that “domestic demand remains subdued.”

Rabobank contrasts the “very different” performance of the New Zealand economy with that of Australia, pointing out that New Zealand has “only emerging from recession in late 2024 to an unbalanced performance last year.” While the bank sees “some strong green shoots for New Zealand in Q1 2026,” it cautions that these appeared “ahead of the headwinds caused by the Iran war.” Against this backdrop, Rabobank concludes that “the shock of last week’s RBNZ policy decision has underpinned some concerns over the signals that RBA Governor Bullock may provide this week.”

Chart Analysis NZD/USD


Technical Analysis: NZD/USD retains a negative outlook under the 100-day SMA

In the daily chart, NZD/USD keeps a bearish bias as spot holds beneath the 20-day simple moving average from the Bollinger Bands and well under the 100-day moving average. Price is pressing the lower Bollinger Band, which offers initial support while the Relative Strength Index (14) at roughly 34 is recovering from oversold territory but still reflects weak demand rather than a decisive bullish turn.

On the topside, immediate resistance is located at the 20-day Bollinger mid-line around 0.5635, followed by the upper band near 0.5725 and then the 100-day moving average at 0.5755, which together outline a dense supply area that would need to be reclaimed to ease downside pressure. On the downside, the lower Bollinger Band at 0.5545 is the first layer of support; a sustained break below this floor would expose fresh lows and extend the prevailing downtrend.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

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.

Nov 09, 07:48 HKT
New Zealand’s governing coalition holds slim majority in preliminary count

New Zealand’s ruling coalition has a slim majority in preliminary election results, although the outcome remains uncertain as about 14% of the votes have yet to be counted. The final results will determine which political group will govern the country for the next three years.

The tightest vote in years marked a significant setback for the country’s two major political parties, the center-right National Party, led by Christopher Luxon, and the center-left Labour Party, headed by Chris Hipkins, as voters threw more support behind minor parties on the ideological flanks than before.

Currently, New Zealand’s governing right-leaning bloc holds a narrow lead with 67 seats in an expanded 131-seat parliament. But that may be overturned as the remaining votes are counted, with the final results due November 27.

Market reaction  

At the press time, the NZD/USD pair is adding 0.37% on the day to trade at 0.5560.

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.

Nov 09, 07:19 HKT
Australian Dolllar edges lower to near 0.6850 on robust US jobs data
  • AUD/USD posts modest losses near 0.6860 in Monday’s early Asian session.
  • US NFP rose by 165,000 in October, above the market consensus.
  • RBA hikes the OCR to its highest level in 18 years last week.

The AUD/USD pair trades with mild losses around 0.6860 during the early Asian session on Monday. Stronger-than-expected US employment data provide some support to the US Dollar (USD) against the Australian Dollar (AUD). Traders brace for China’s Consumer Price Index (CPI) inflation report, which is due later in the day.

Data released by the US Bureau of Labor Statistics (BLS) on Friday showed that Nonfarm Payrolls (NFP) climbed by 165,000 in October. This figure followed a 60,000 rise in September (revised from 29,000) and surpassed market expectations of 65,000. Meanwhile, the Unemployment Rate declined to 4.1% in October from 4.2% in September.

Traders raise their bets on a further quarter percentage point hike at the December policy meeting. Probability rose to 79.6%, according to the CME FedWatch tool, though the indicator pointed to only one more increase after.

On the Aussie front, the Reserve Bank of Australia (RBA) decided to lift the Official Cash Rate (OCR) by 25 basis points (bps) to 4.85% from 4.60%. This put the cash rate at the highest level Australia has seen since 2008.

In its monetary policy statement, the Australian central bank said inflation remains elevated and is forecast to continue to do so through much of 2027. Treasurer Jim Chalmers acknowledged the government "has more work to do" to help bring down inflation.

Aussie slides as risk selloff and RBA credibility worries weigh

Strategists at Societe Generale highlight that AUD/USD traded in a “0.6862 - 0.6954 overnight range,” with spot “skid[ding] below 0.69 for first time since early July” and now “on track for lowest weekly close since January.” They flag nearby “support 0.6865, resistance 0.7080,” and note that the move has been compounded by policy concerns after Hauser “warns public confidence in ability of RBA to counter inflation is at risk.” According to Societe Generale, broader “FX spillovers from the selloff in stocks surfaced in the AUD, the SEK and NZD in G10,” while “the KRW and MXN rank among the worst performers in EM.”

Daly flags more tightening as strong jobs data keeps Fed focused on inflation

Fed’s Daly delivered a distinctly more hawkish tone, with an FXS Speechtracker score of 8/10 compared to the established baseline of 6.4/10, underscoring that “real wages are falling” even as the job report is “good news” and wage growth “isn’t booming.” The emphasis that inflation has been “high for too long,” must remain the “number 1 priority,” and that policy “will have to tighten further” while the strong labor market gives the Fed “latitude” reinforces a bias toward additional rate hikes, albeit in a “deliberate” and data-dependent manner. Overall, the message leans toward further tightening risk, with only limited concern about a substantial growth slowdown and some acknowledgement that AI-related repricing and demand cooling could modestly temper activity.

The FXS Fed Sentiment Index rose by 0.95 points to 143.10, firmly in hawkish territory and consistent with the above-baseline FXS Speechtracker reading. This move signals that markets should interpret Daly’s remarks as incrementally hawkish for the Dollar, with elevated odds of further policy tightening remaining in focus.

Chart Analysis AUD/USD


Technical Analysis: AUD/USD keeps a bearish vibe under the 100-day SMA

In the daily chart, AUD/USD extends its decline with a clear bearish bias as spot holds below all key moving averages and the entire Bollinger envelope. The 20-period simple moving average (SMA) from the Bollinger Bands and the 100-day SMA, reinforces a topside cap, while the Relative Strength Index (14) near 33 suggests lingering downside pressure, though approaching oversold territory.

On the topside, initial resistance emerges at the lower Bollinger Band around 0.6875, with the Bollinger midline at 0.6985 acting as the next hurdle before the 100-day SMA near 0.7025 and the upper Bollinger Band at 0.7090. As no meaningful support levels are evident below the current price in this framework, a sustained break back above 0.6875 would be the first signal that sellers are losing immediate control, while failure to do so keeps the door open for further weakness.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

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.

Forex Market News

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