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Australian dollar daily update for 2nd November 2017

BY DEB SHAW | 

The Australian dollar is up today, thanks to strong trade balance data. The trade balance figures beat expectations by a wide margin thanks to surging iron ore exports. The country's exports of professional services and non-monetary gold are also up significantly. As strong net exports bodes well for future GDP growth, the currency is strengthening as a result. Yesterday, we warned that the Aussie was starting to look oversold in the short-term time frame. While this remains true today, the currency is should re-enter normal trading conditions in the near future if it can keep strengthening. Building approvals also beat expectations.  

AUD/USD is currently trading just below 0.7710. Looking at EUR/AUD, the pair is currently just below 1.5090. The GBP/AUD exchange rate is currently below 1.7190.   

This is a pretty light week for the Australian dollar. New home sales (-6.1% vs. 9.1% prior) and private sector credit (0.3% vs. 0.5%) were weak and lower than previous figures. AiG performance of manufacturing indices were also lower than the previous figure (51.1 vs. 54.2 prior). Trade balance figures were much higher than expectations (1745m vs 1200m expected), on higher exports of industrial metals. Tomorrow, we’ll see retail sales figures. Last week saw inflation figures miss expectations.

Updated