Australian Dollar Strengthens as Trade Surplus Surges!

The Australian dollar strengthened against the US dollar (USD) during Asian trading on Thursday (November 5, 2026), following a report on Australia’s balance of trade that showed a significant increase in its surplus. The AUD/USD pair hovered around the 0.7010 level, marking its second consecutive day of gains. This rise was driven by an improvement in Australia’s international trade performance, coupled with a weakening US dollar amid shifting global political and economic sentiment.

Australia’s trade surplus for September surged to A$2.826 billion, up from a revised surplus of A$185 million the previous month (previously reported as A$495 million). This growth was fueled by a 2.3% increase in exports, while imports fell by 3.3%. These figures reflect an improvement in Australia’s foreign trade performance, providing support for the domestic currency through increased export earnings.

The strengthening of the Australian dollar was further bolstered by a decline in the US dollar following the Democratic Party’s victory in securing control of both chambers of the US Congress during the midterm elections. This outcome has raised market concerns regarding potential obstacles to the economic policies of President Donald Trump’s administration, including government spending plans and other fiscal measures. Furthermore, growing optimism for an end to the conflict in the Middle East has led to a sharp drop in global oil prices, easing inflationary pressures and placing additional downward pressure on the US dollar.

Nevertheless, the weakness of the US dollar remains tempered by domestic economic data, which points to a relatively solid underlying condition. An ADP report indicated the addition of 86,000 private-sector jobs in October, surpassing market expectations of 69,000. Meanwhile, the ISM Services PMI index edged down slightly from 54.9 to 54.5, though it remains in positive territory.