The Australian Dollar fell due to a report that the trade deficit more than doubled in May which has raised the issue that Australia needs to depreciate the currency to encourage a higher level of exports.
The Aussie Dollar fell to 75.03 U.S cents in Sydney from 75.22 cents as of 12:07pm in an instant before the report was released.
The increased trade deficit indicates that more foreign exchange is required to pay for imports. Currency gains this week have been erased due to the report after a series of stronger than expected economic reports which raised speculation of another rise in interest rates.
``We remain Australian dollar bearish in the long term,'' said Sharada Selvanathan, Singapore-based currency strategist at BNP Paribas SA. ``Clearly these trade numbers won't help it.''
The trade deficit figures are A$2.27 billion from a revised April figure of A$1.12 in April, reported by the Bureau of Statistics in Sydney today.
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