The Australian dollar just spiked

Atsushi Tomura/Getty Images for FIVB

Australian dollar buyers just came out in force in the wake of this morning’s balance of payments data.

With global markets cautious overnight, the AUD declined to below 0.7950 against the USD.

But it just spiked sharply, and a short time ago was back over 0.7980.

Investing.com

The balance of payments data showed that quarterly exports will contribute 0.3% to GDP, against a forecast decline of 0.1%. More details on the data release here.

That subsequently raised expectations ahead of tomorrow’s Q2 GDP report, and currency markets reacted by driving the Aussie dollar higher.

The AUD has traded in a narrow range just below US80 cents since the middle of August, assisted by higher commodity prices and solid growth in China.

Last week, Commonwealth Bank’s currency strategists outlined three factors that could drive the AUD above US85 cents.

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