The Australian dollar offset its initial gains and fell sharply against most major currencies in the very early trading hours on Tuesday. The Aussie gained some ground after the release of much better-than-expected trade deficit results.
The Australian Bureau of Statistics posted a trade deficit figure of -427 million, nearly two times less than investors’ expectations of -800 million, with exports being 3% up while imports fell by 6% on month.
Almost immediately after the data was released, the AUD edged to 1.0454 against the greenback. However, the profits were short-lived and the Aussie plummeted sharply to 1.0396. The steep decline came after the RBA kept the interest rate of 3% unchanged, as expected, saying that negative aspects for the global economy seemed to have been halted for the moment.
However, the RBA said in a statement that it is prepared to cut interest rates to a record low in the future ‘’should that be necessary to support demand”.
At the time of writing, the AUD was trading at 1.0399.
The AUD/USD Forex charts have been moving up and down during the last week as the pair appeared to be battered by continuous poor economic data coming from Australia. Investors were left disappointed, following a report on Monday saying that building approvals in the world’s twelfth-biggest economy fell by 4.4% in December amid forecasts for a rise by 1%.
Another report showed that Job Advertisements in the country have dropped by 0.9% in January, signaling a fragile labour market and a negative employment growth, especially after a decline by 2.8% for the previous month.
