Australian Dollar gains limited by geopolitical tensions despite stronger Chinese trade surplus and improved consumer confidence.
The Australian Dollar (AUD) edged higher to 0.6930 against the USD on Tuesday, recovering from session lows near 0.6910. Gains were capped by a risk-off market sentiment, despite a 4.1% rise in Australia’s Westpac Consumer Sentiment Index for July.
China’s trade surplus surged to USD 125.62 billion in June, up from USD 105.43 billion in May, driven by a 27% jump in exports. The data provided some support to the AUD, as China remains Australia’s largest trading partner.
Geopolitical risks, including escalating Middle East tensions and U.S.-Iran clashes, weighed on investor sentiment. Oil prices climbed to near one-month highs, adding to inflation concerns and pressuring the risk-sensitive AUD.