When are the China data releases and how could they affect the AUD/USD?

China is scheduled to release April imports, exports and trade balance figure later today.

Imports are forecasted to rise 16 percent year-on-year, up from 14.4 percent growth seen in March. Exports are expected to jump 6.3 percent after 2.7 percent drop registered in March.  The April trade balance is expected to show a surplus of $27.50 billion in following the $4.98 billion deficit a month earlier.

Impact on AUD/USD

Risk assets tend to cheer upbeat China trade numbers. However, this time it is different... A big beat on trade surplus, and more importantly, a surge in exports to the US may add to US-China trade tensions and weigh over the Aussie dollar and other risk assets.

That said, the Aussie dollar may find bids if the Chinese data shows a big jump in iron ore and copper imports (Australia's top exports). A rally in the risk assets, including AUD, cannot be ruled out if the data shows a big decline in the Chinese exports to the US.

About China trade data

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.