Daily Morning Report 13.01.2016

The Australian dollar rose against its U.S. counterpart on Wednesday, helped by data showing that China’s trade surplus widened unexpectedly last month.

AUD/USD hit 0.7049 during late Asian trade, the pair’s highest since January 8; the pair subsequently consolidated at 0.7017, gaining 0.45%.

The pair was likely to find support at 0.6937, Tuesday’s low, and resistance at 0.7075, the high of January 8.

Data earlier showed that China’s trade surplus widened to $60.09 billion in December from $54.10 billion the previous month. Analysts had expected the trade surplus to narrow to $53.00 billion last month.

China’s imports declined at an annual rate of 7.6% last month, compared to expectations for an 11.5% drop, while exports fell 1.4% compared to expectations for an 8.0% slide.

China is Australia’s biggest export partner.

Meanwhile, sentiment slightly improved after the People’s Bank of China set the mid-point for the yuan at 6.5630 to the dollar, unchanged from firm fixes on the previous two days.

The fixing came as the central bank put a squeeze on offshore sellers of the currency by making it prohibitively expensive to speculate against the yuan in offshore markets, easing fears of sustained depreciation.

The Aussie was also higher against the euro, with EUR/AUD declining 0.76% to 1.5434.