AUD/USD hits multi-year highs above 0.7250 despite weak Chinese imports

• AUD/USD has shrugged off weakness in base metal prices due to soft China imports data is up on the day.
• In fact, the pair has hit fresh multi-year highs above 0.7450 in recent trade.

AUD/USD printed fresh multi-year highs above 0.7450 in recent trade and is currently sat as the third best performing G10 currency on the day after NOK and SEK. The pair currently trades with gains of around 30 pips or 0.4%.

AUD shrugs off soft Chinese trade numbers

Concerningly for AUD, given that Chinese consumers suck up over one-third of the country’s total exports, Chinese imports grew at a much slower YoY pace of 4.5% (expected was 6.1%) in November. Indeed, Chinese imports of iron ore and copper (both key Australian exports) both fell during the month, leading two a decline in LME copper prices (to which AUD has a positive correlation). But weakness in base metals on the back of underwhelming demand for imports from China has not been able to hold down AUD for long.

China, which had reportedly been keeping up to 82 shipments of Australian coal worth up to AUD$ 1.1B, reportedly allowed one ship in, perhaps spurring some hopes of a normalization in Australia/Chinese trading relations. Allowing one out of 82 stranded ships to doc can hardly be taken as a big positive gesture, most would argue, but AUD seems not to be too concerned by the whole situation and is currently ploughing on to fresh multi-year highs vs the US dollar.

AUD/USD remains supported above bullish-trendline

AUD/USD saw a steep drop during the early part of Monday’s European trading session, dropping as low as the 0.7370s. However, the pair bounced firmly from a medium-term upwards trendline linking the 13, 19 and 23 November and 1 and 2 December lows, which came into play in the 0.7370s.