When is China trade balance and how could it affect AUD/USD?

China's Trade Balance Overview

China’s General Administration of Customs is set to release May month trade balance figures sometime near 02:00 GMT on early Monday. Considering the influence Chinese data have over antipodeans, coupled with the actual market behavior of the US-China trade dispute, today’s trade data becomes the key for commodity-linked currencies. It should, however, be noted that holiday at Australia can play its role in limiting the Aussie’s response to the key data.

Forecasts suggest an increase in trade balance figure to ¥140.51 billion in May from ¥93.57 billion in April. Exports are expected to have grown by 15.5 versus 3.1% whereas imports are likely to register 15.9% expansion over 10.3% previous on a yearly basis.

In a case of trade balance in US Dollar (USD) terms, the surplus might increase to $20.50 billion from $13.83 billion prior while exports and imports both are likely to mark -3.8% contractions compared to -2.7% and +4.0% respective priors.

How could it affect the AUD/USD?

Pessimism surrounding the US-China trade deal recently fall short of limiting the AUD/USD pair’s advances amid the US Dollar (USD) weakness. However, further disappoints from a largest customer can increase chances of further rate cuts from the Reserve Bank of Australia (RBA) and hence any deterioration in headline economics from China can add further weakness into the Aussie.

On a brighter note, an upbeat trade balance number can propel the AUD/USD pair beyond 50-day simple moving average (SMA) level of 0.7020 towards 0.7070 mark comprising 100-day SMA.

In a case of disappointment, as it has been off late with Chinese statistics, 0.6960 and 0.6940 are likely immediate supports that should be watched during the pair’s additional weakness from now.

Key Notes

AUD/USD: Holiday at Australia limit upside around 50-day SMA ahead of China data

AUD/USD Analysis: bulls unconvinced, but dollar's weakness favors the upside

About China's Trade Balance

The Trade Balance released by the General Administration of Customs of the People’s Republic of China is a balance between exports and imports of total goods and services. A positive value shows a trade surplus, while a negative value shows a trade deficit. It is an event that generates some volatility for the CNY. As the Chinese economy has an influence on the global economy, this economic indicator would have an impact on the Forex market. In general, a high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.