Australia’s trade deficit narrows but retail sales slow down

There was mixed data out of Australia today.

A report showed a smaller-than-anticipated trade deficit. This led to a brief spike up in the AUDUSD right after the data. However, the jump to $0.7268 was very short-lived and then the aussie fell back down after separate data showed disappointing retail sales for Australia.

The trade balance in April showed a deficit of A$1.579bn, less than the A$2.1bn economists had forecast. The trade balance was -A$1.971bn in March, and has been contracting for four straight months now.

A small rise in exports for the month was prompted by an increase in agricultural commodities, while imports of industrial goods also slowed.

Retail sales came in a little worse than expected, however. Sales rose 0.2 per cent month-on-month according to the Australian Bureau of Statistics, short of the 0.3 per cent economists were looking for. They had risen 0.4 per cent in March.

Weighing down the reading were food sales, which contracted 0.3 per cent after posting a 0.5 per cent rise in March. The results tend to show a lot of monthly variation but 0.2 per cent is towards the lower end of the -0.1 to +0.7 per cent range from 2015.

On Wednesday, the AUDUSD rose sharply to a two-week high of $0.7300 after stronger-than-expected first quarter GDP data for Australia.

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