The Australian dollar is trading higher today on the back of strong data out of China and further strengthening of the Chinese wan.

At 11.47am (GMT) the Aussie dollar was trading at US70.18c up from US69.89c in yesterday’s trade.

After reaching a high of US70.46c, the Australian dollar has pulled back somewhat but has continued to hold onto some of its gains, after trade balance, Import and export figures  out of China came in well above expectations.

Imports from the world’s second largest economy hit the market at -1.4 percent against expectations of a -8 percent fall, while the exports number came in at -7.6 percent against predictions for a figure of -11.5 percent.

The trade balance figures also surprised to the upside coming in at US$60.9 billion against market expectations for a figure of US$50 billion.

The Chinese government also kept a tight peg on the Yuan for a fourth straight day by not letting the currency fluctuates by more than 2 percent which strengthened the currency and kept speculators on the sidelines.

The news was a sigh of relief after recent heavy falls in the local stock market but some analysts are looking for more evidence that the Chinese economy is not falling off the rails.

All eyes will now be on tomorrow’s release of Key employment data from Australia which will determine if the Aussie dollar will continue its rally or dive back below the US70c mark.