Following a drop of about 1.25% in the last session, AUD/USD saw an uptick, trading around 0.6530 during the Asian session on Monday. Even with China’s September trade balance registering at 645.47 billion yuan—down from 732.7 billion yuan previously—the exchange rate didn’t show significant changes. Exports grew by 8.4% year-on-year in September, contrasting with a 4.8% increase in July. Meanwhile, imports rose by 7.5% on a yearly basis, compared to a prior growth rate of 1.7%.
In U.S. dollar terms, China’s trade surplus stood at $90.45 billion, narrower than the anticipated $98.96 billion for September and down from the previous $102.33 billion.
The AUD/USD exchange rate faced challenges due to escalating trade tensions between Australia’s major trading partners, China and the U.S. Recently, President Trump indicated there was no reason to meet with Chinese President Xi Jinping at their upcoming summit in South Korea. He also proposed implementing 100% tariffs on Chinese imports, sparking concern.
In retaliation, China has hinted at countermeasures should Trump not retract his tariff threats, raising worries over how this trade war might influence the U.S. economy. However, in a more conciliatory tone, Trump mentioned on Truth Social that he believes China’s economy is “fine” and expressed a desire to “help China, not hurt it.”
According to a report from Sunday’s Age newspaper, a leaked preliminary document from Australian Prime Minister Anthony Albanese’s office suggests that discussions have begun with mining officials about contributing to the A$1.2 billion ($776.28 million) Critical Minerals Strategic Reserve. Australia is mulling over setting minimum prices for critical minerals and possibly funding new rare earth projects as part of an agreement with the United States.
The AUD/USD pair might find support from a weakening U.S. dollar due to the ongoing government shutdown in the United States. The first federal paychecks for October were due to be issued on Friday but were delayed because of the shutdown. This disruption is expected to persist through at least Tuesday as the U.S. observes Columbus Day on Monday, with no resolution to the shutdown in sight.
