The Australian Dollar (AUD) remained largely unchanged above the 0.7150 level against the US Dollar (USD) following the release of key economic data from Australia and China on Thursday. Australia's trade surplus for July was reported at A$1,923M, which was higher than market expectations of A$1,390M but lower than the previous month's revised surplus of A$2,341M [1][3]. The trade balance narrowing was accompanied by a 3.3% month-on-month decline in exports and a 2.5% drop in imports for July [3].
Meanwhile, China's RatingDog Services PMI rose to 51.4 in August from 50.4 in July, surpassing the consensus estimate of 50.6 and indicating expansion in the services sector [1][2]. Despite the upbeat Chinese PMI, the AUD/USD pair failed to gain momentum, with spot prices oscillating in a tight range and trading at 0.7165 to 0.7168, down marginally on the day [2][3].
Market reaction to both the Australian trade data and the Chinese PMI was muted, as the AUD/USD pair showed little to no impact from the reports [2][3]. The technical outlook for AUD/USD remains mildly bullish as long as prices hold above the 100-period Simple Moving Average (SMA) support at 0.7130, with further upside consolidation possible. However, a break below this level could trigger technical selling and extend the recent corrective pullback from the multi-month top reached in August [1].
Looking ahead, rising expectations for a Reserve Bank of Australia (RBA) rate hike, fueled by stronger-than-expected July inflation and second-quarter GDP, continue to support the AUD. However, increased bets for a US Federal Reserve rate hike and geopolitical tensions are providing support to the USD, acting as a headwind for the AUD/USD pair. Traders are now awaiting the US ISM Services PMI and the Nonfarm Payrolls report for further direction [1].
CONCLUSION
Despite stronger-than-expected trade and PMI data from Australia and China, the Australian Dollar showed limited reaction and remained range-bound against the US Dollar. Market participants are focused on upcoming US economic releases and central bank policy expectations for further cues. The overall market impact from the latest data is low, with technical and fundamental factors keeping AUD/USD steady.