Australia’s below-forecast trade surplus fails to move needle on AUD/USD

• Australia’s trade surplus narrowed in April. 
• AUD/USD has shrugged off trade numbers, continues to trade around 0.6965. 
• A 20-pip drop to key support could be seen if equities report losses.

AUD/USD is barely moving in response to Australia’s weaker-than-expected trade surplus figure released at 01:30 GMT. 

The trade surplus narrowed to A$ 4,871 in April, missing the expected rise to A$ 5,100 million from March’s surplus of A$ 4,949 million. 

Exports increased by 3% in April following a 2 percent contraction in March. Imports also registered a 3% growth. 

So far, the data has had little impact on the Aussie dollar. The AUD/USD pair continues to trade around 0.6965 – a level seen ahead of the release of Australia’s trade figures. 

The trade data has come a day after Australia’s Bureau of Statistics reported first quarter growth rate at a decade low. The GDP rose to an annualized rate of 1.8% fall short of the long-term average of 3.5% by a big margin and hitting the lowest level since the global financial crisis. 

The dismal growth numbers underscored the need for aggressive stimulus. The Reserve Bank of Australia cut rates to a record low of 1.25% earlier this week and is seen delivering another rate cut in the second half of this year. 

Many analysts, however, believe the rate cut may not come through in July if the jobless rate remains unchanged at 5.2%. The labor data is due next week. 

As for today, the pair may fall back to the 10-day moving average of 0.6947 if the equities turn risk averse. As of writing, the futures on the S&P 500 are flashing a 0.11% drop. 

Technical Levels