Australia: Stronger than expected exports for Q1 - BBH

Research Team at BBH, notes that the Australia reported stronger than expected exports for Q1. 

Key Quotes

“This has the effect of making participants less confident that the RBA will cut rates at back-to-back meetings as so many thought likely.  Exports were flat in Q4 15 but contributed 1.1 percentage points to Q1 16 GDP growth.  The market expected a 0.7 point contribution.  Australia also reported stronger building approvals (3% instead of minus 3%), and even though the March series was revised lower, the generally favorable data helped the Aussie extend yesterday's recovery.

Yesterday, the Australian dollar briefly traded near $0.7150 before recovering to close near new session highs just below $0.7190 (possible hammer pattern--Japanese candlestick), and today tested $0.7250.  Provided it holds above $0.7220 now, it can work its way a bit higher.  As a mile marker, note that the 20-day moving average is found near $0.7285.  The Aussie has not been above this average since a downside reversal was posted on May 3.”