As a result, the US dollar trade surplus widened from $75.34 billion to $125.16 billion.
The better-than-expected trade figures drove buyer demand for the Aussie dollar. China accounts for one-third of Australian trade. Australia has a trade-to-GDP ratio of over 50%, with 20% of the Australian workforce in trade-related jobs. A pickup in demand would be a boon for the Australian economy and the Aussie dollar.
China, Trade, and the RBA Rate Path
Significantly, an improving Chinese economy could influence the RBA interest rate trajectory. In February, RBA Governor Michele Bullock affirmed that RBA staff included China’s economic woes in the RBA growth forecasts. A more robust economic outlook could raise growth forecasts and impact bets on an RBA rate cut.
