China’s August Trade Balance: Surplus widens to $119.09 billion as expected

China's Trade Balance for August, in US Dollar (USD) terms, arrives at $119.09 billion, almost in line with $119.1 billion estimates, but higher than the July reading of $112.5 billion.

Exports surge 25% year-over-year (YoY) in August, as expected, faster than the previous reading of 23.9%. The country’s imports surged 28.2% YoY in the same period, slower than expectations of 30%. In July, Imports grew by 27.5%.

In Chinese Yuan (CNY) terms, the Trade Surplus widened to 809.3 billion, more than the 795 billion estimate and the previous release of 767.07 billion. Exports (CNY) grew strongly by 18.6% compared with 17.8% in July. Imports rose 21.7%, faster than the previous reading of 21.2%.

Market reaction

The Australian Dollar (AUD) has attracted some bids near its day's low against the US Dollar (AUD) after the release of China's Trade Balance data, being a liquid proxy to Beijing's economy. As of writing, AUD/USD trades 0.15% lower to near 0.7208.

Economic Indicator

Trade Balance USD

The Trade Balance released by the General Administration of Customs of the People’s Republic of China is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the CNY. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market. In general, a high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.