Andrew Hanlan, Research Analyst at Westpac, notes that Australia's current account deficit (CAD) has widened modestly during 2017, notwithstanding a slight improvement in the September quarter.
Key Quotes
“The 2017 trend partially reverses the significant improvement in the current account evident during 2016, with commodity prices and the terms of trade moving a little lower of late.”
“The CAD was $9.1bn in the September quarter 2017, some $539mn lower than in June but representing a $4.5bn widening from the low at the end of 2016.”
“The current account deficit is currently relatively low by historical experience, at 2.0% of GDP. That compares with a post 1990 average of 4.2%. The trade balance is in surplus, +0.7% of GDP (vs an historic average of -1.0%) and the net income deficit at 2.7% of GDP is below the historic average of 3.2%.”
“In Q3, the trade surplus was $3.1bn, down from $3.4bn in Q2 as the terms of trade fell by 0.4%, following a 6.0% decline in Q2. Despite this, the terms of trade is still 17% above the low at the start of 2016.”
“The net income deficit was $12.2bn in the most recent quarter, narrowing from $13.1bn in the June quarter.”
“Export volumes advanced in the third quarter, increasing by 1.9%. That was matched by a 1.9% rise in imports, with both goods and services increasing to meet rising domestic demand. That saw real net exports as being neutral for Q3 GDP.”
“Export earnings were little changed in the September quarter, edging 0.2% lower. Export prices fell by 2.0%, dented by lower commodity prices.”
“The import bill was also little changed in Q3, edging 0.2% higher. The price of imports fell, declining by 1.6%, as the Australian dollar strengthened, up 5% against the US dollar, to 78.9¢, and rising some 2.9% on a TWI basis.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD posts gain, yet dive below 0.6500 amid Aussie CPI, ahead of US GDP
The Aussie Dollar finished Wednesday’s session with decent gains of 0.15% against the US Dollar, yet it retreated from weekly highs of 0.6529, which it hit after a hotter-than-expected inflation report. As the Asian session begins, the AUD/USD trades around 0.6495.
USD/JPY finds its highest bids since 1990, approaches 156.00
USD/JPY broke into its highest chart territory since June of 1990 on Wednesday, peaking near 155.40 for the first time in 34 years as the Japanese Yen continues to tumble across the broad FX market.
Gold stays firm amid higher US yields as traders await US GDP data
Gold recovers from recent losses, buoyed by market interest despite a stronger US Dollar and higher US Treasury yields. De-escalation of Middle East tensions contributed to increased market stability, denting the appetite for Gold buying.
Ethereum suffers slight pullback, Hong Kong spot ETH ETFs to begin trading on April 30
Ethereum suffered a brief decline on Wednesday afternoon despite increased accumulation from whales. This follows Ethereum restaking protocol Renzo restaked ETH crashing from its 1:1 peg with ETH and increased activities surrounding spot Ethereum ETFs.
Dow Jones Industrial Average hesitates on Wednesday as markets wait for key US data
The DJIA stumbled on Wednesday, falling from recent highs near 38,550.00 as investors ease off of Tuesday’s risk appetite. The index recovered as US data continues to vex financial markets that remain overwhelmingly focused on rate cuts from the US Fed.