Aud strengthens as chinas trade surplus grows in may

The Australian Dollar AUD rose modestly against the US Dollar on Monday as it bounced back from its decline in the previous session. The AUDUSD pair maintained its strength after Chinas important economic data was announced.The AUD gained ground against the USD, trading at 0.7675, up from its previous close of 0.7662. The currency also saw gains against other major currencies, including the Euro and the Japanese Yen.The resurgence of the AUD can be attributed to the release of Chinas key economic data, which showed that the countrys economy grew by 6.9% in the first quarter of 2021. This exceeded expectations and provided a boost to the AUD, as China is Australias largest trading partner.Investors were also encouraged by Chinas industrial production, which increased by 14.1% in March compared to the same period last year. This was higher than the forecasted 18.5% and signaled a strong recovery in Chinas manufacturing sector.The AUD also received support from rising commodity prices, as Australia is a major exporter of natural resources such as iron ore and coal. The increase in demand for these commodities has helped to lift the Australian economy and strengthen the currency.However, the AUDs gains were limited by a slightly stronger US Dollar, which has been buoyed by rising US Treasury yields. The 10-year US Treasury yield reached its highest level in over a year, reflecting expectations of a strong economic recovery in the US.Some analysts also remain cautious about the AUDs outlook, as the country continues to face challenges such as trade tensions with China and the slow rollout of COVID-19 vaccines.In addition, the Reserve Bank of Australia RBA has maintained its dovish stance, stating that it will not consider raising interest rates until inflation reaches its target range of 2-3%. This could limit the AUDs gains in the long term.Overall, the AUDs performance on Monday reflects a balance between positive economic data and ongoing uncertainties. Investors will continue to monitor developments in China and the US, as well as the RBAs monetary policy decisions, for further direction on the currencys movement