Australia’s trade surplus expanded significantly in October, reaching AUD 5.95 billion, as reported by the Australian Bureau of Statistics on Thursday. This figure exceeded market expectations of AUD 4.5 billion and outpaced the revised September surplus of AUD 4.53 billion.
Export and Import Dynamics
The growth in the trade surplus was primarily driven by a 3.6% month-on-month (MoM) rise in exports, rebounding from a revised 4.7% decline in September. Imports, on the other hand, saw a modest increase of 0.1% MoM in October, following a 2.8% drop in the previous month.
The rebound in exports highlights improving global demand for Australian goods, while the slight uptick in imports reflects a stabilization of domestic consumption trends.
Market Reaction
Despite the strong trade surplus data, the AUD/USD pair remains under pressure, trading 0.23% lower on the day at 0.6425 at the time of reporting. The Aussie’s weakness is attributed to broader bearish sentiment amid concerns over potential interest rate cuts by the Reserve Bank of Australia (RBA) and a rebound in U.S. Treasury yields, which support the U.S. Dollar.
Market participants are also cautious ahead of upcoming U.S. economic data, including the Nonfarm Payrolls report, which could shape the outlook for global financial markets.
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