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AUD/USD Big Trade 03.10.16 -63
3/14 -- AUD/USD Big Trade -- Close at market (now 0.7543)
Place Order to SELL AUD/USD at 0.7480
The Australian dollar is finally falling and after this week’s horrid Chinese trade numbers. Exports fell 25.4% in February, the largest decline since May 2009. Imports also dropped 13.8%, confirming the weakness of internal and external demand. Australia can’t grow without China growing and the latest slowdown in the world’s second largest economy spells big trouble for the land down under. Up to now the Australian economy has not felt the full brunt of the contraction of the mining sector. The country’s GDP has grown at an impressive 3% rate while Retail Sales and consumer spending continue to expand at respectable 0.3% pace. Indeed the RBA has been downright sanguine about the economic prospects of the country arguing that falloff in the mining sector will be made up by real estate, services and tourism revenue. As a result the market has plowed back into the Aussie believing that its 2% yield will remain intact. We think the authorities are deluding themselves. Last month the employment data started to show the first cracks in the armor. Jobs contracted by -8K as the mining layoffs finally started to hit the payroll numbers. That trend is likely to continue with next week’s employment report.