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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FOREX
- The delay in policy normalization by the RBA due to the renewed lockdown policies imposed by the government to stop the Delta variant crisis has certainly been of the major forces behind the AUD weakness in the past few months.
- However, the deceleration in the Chinese economic activity, one of the engines of Australia's GDP growth and investment, has been also weighing on the Aussie this year.
- The chart below shows how Chinese equities (HSI index) have strongly co-moved with the AUDUSD exchange rate in the past few years.
- Interestingly, AUDUSD reached its (post Covid) peak in the end of February (at 0.80), which also corresponds to the peak in Chinese economic activity, before starting to trend lower.
- Hence, the Australian Dollar could remain under pressure as long as sentiment keeps declining in China with investors very skeptical in buying the dip in Chinese assets.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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