FX.co ★ Australian Dollar Gains on Strong Trade Data

On Thursday, the Australian dollar surged past the $0.64 mark, extending its gains from the previous day, buoyed by the release of robust trade balance figures. For March, Australia posted a trade surplus of A$6.9 billion, a notable increase from February's adjusted figure of A$2.85 billion, and surpassing market projections of A$3.13 billion. Adding further support to the currency, data from April indicated a continued expansion in manufacturing activity, with new orders accelerating at their quickest rate in nearly two and a half years. This growth serves as an encouraging indicator for domestic demand. Additionally, on Wednesday, data revealed a deceleration in core inflation, dropping to 2.9% from 3.3%, heightening expectations for an imminent interest rate reduction by the Reserve Bank of Australia (RBA). The central bank is expected to cut its cash rate by 25 basis points to 3.85% in May, with markets anticipating a further decline to 2.85% by the end of the year. Despite these positive developments, the broader economic outlook is clouded by domestic uncertainties and mounting external risks, particularly concerning the potential global repercussions of new U.S. tariffs.