Australian Trade Deficit Narrows, Adds to Signs of Economic Recovery
March 4th, 2010 Posted in Aussie - Kiwi, In-Depth Analysis
Australia’s trade deficit narrowed in January to A$1.18 billion ($1.07 billion) from a revised A$2.17 billion in December. The better than expected result was due to the growth in exports, particularly of iron ore to China. As China’s economic growth exceeds expectations, signs mount that its demand for raw materials will be key in Australian economic expansion and recovery from recession.
This result is yet another economic report that solidifies the strength of Australia’s economic recovery, underscoring the Reserve Bank of Australia’s (RBA) decision to resume interest rate increases during their March 2nd meeting. RBA Governor Glenn Stevens increased the benchmark interest rate this week by a quarter percentage point to 4% for the fourth time.
As evidence mounts that Australia’s economic recovery is indeed stable and the need for the monetary stimulus continues to decline, expectations rise for further monetary tightening, including a continuation of interest rate hikes. These are supporting the AUD and are helping to maintain it above the 90.00 U.S cents price level.
Start trading with Natalie R. now:
Tags: AUD, Aussie, Aussie Dollar, Australia, Australian Dollar, Forex, forex blog, forex news, fx, RBA, reserve bank of australia
