FXStreet (Delhi) – Yann Quelenn, Market Analyst at Swissquote, notes that the recent Chinese data showed that the monthly trade balance widened to $61.6bn, the highest level on record.
Key Quotes
“October exports contracted -6.9% y/y against -3.2% expected. Imports were also weaker, dropping -18.8% y/y against -15.2% expected. In addition, the persistently weak commodity prices continued to take their toll as commodity imports contributed 8.1% to the whole -18.8% fall.”
“The weak commodity imports indicates that Australia’s hopes of renewed appetite supporting their growth look premature. AUDUSD recovery rally to 0.7066 has already run into significant supply and will likely retest intraday lows at 0.7017.”
“The current backdrop keeps us negative on commodity currencies. Elsewhere, China foreign reserves unexpectedly improved to $3525.5bn in October from $3514.1bn in September. While no clarification has come from the PBoC its likely that the rise was due to valuations adjustments.”
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