Australia's trade deficit narrowed sharply in July

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Australia’s trade position improved sharply in July, according to data released by the Australian Bureau of Statistics (ABS) earlier today.

After seasonal adjustments, the trade deficit narrowed to $2.41 billion, an improvement on the $3.25 billion deficit seen in June.

It was below market forecasts for a decline to $2.75 billion.

The value of exports increased by $3% to $26.214 billion, thanks to a hefty contribution from non-monetary gold exports, often volatile, which jumped by 62% to $912 million.

Elsewhere rural goods rose $42 million (1%) and net exports of goods under merchanting increased by $6 million (21%), said the ABS. The value of non-rural goods exports fell by $249 million (2%) while services exports ticked up by $8 million.

The main drag on non-rural exports was a decline in the value of metal ores and minerals which fell by 5%, or $281 million.

On the other side of the ledger, the value of imports was flat, coming in at $28.835 billion.

According to the ABS, imports of consumption goods fell by $511 million (6%) while those for intermediate and other merchandise goods rose $231 million (3%).

“Capital goods rose $78 million (2%) and non-monetary gold rose $30 million (6%). Services debits rose $50 million (1%),” the ABS said.

The table below from the ABS breaks down the July trade report, comparing the results to those seen in the prior two months.

Australian financial markets have not budged following the release of the report.

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