I’ve been watching the news about China’s economy lately and keep hearing about potential slowdowns. Since I’m learning about currency relationships, I’m wondering how this affects the Australian Dollar. I know Australia and China have some kind of trade relationship, but I’m not exactly sure how that translates to currency movements. When China’s economy slows down, does the AUD typically go up or down? And why does this happen? Also, are there specific economic indicators I should be watching to predict these movements? I’m still pretty new to fundamental analysis and trying to understand how different countries’ economies affect each other. Any insights would be really helpful for my learning.
When China’s economy slows down, the AUD usually takes a hit. Australia exports less to China, so there’s less demand for our dollar.
I’ve been trading AUD/CNY for years - it’s solid. When Chinese manufacturing tanks, they need way less Australian iron ore and coal. Shows up in the pair within days.
I watch Chinese PMI like a hawk. Below 50? Time to short AUD. Baltic Dry Index works too since it tracks raw material shipping.
2015 Chinese crash was textbook. AUD fell from 0.80 to 0.68 against USD in months as commodities got crushed.
It’s not just trade volume though. China slows down, risk sentiment flips. Everyone dumps commodity currencies and runs to JPY and USD.
Watch Chinese credit growth and property data. Usually gives you weeks before the currency moves hit.
China slows AUD drops. Simple correlation from commodity demand.
Timing’s way more important than people think with this trade.
China’s economic data drops before Australia’s commodity export numbers show what’s really happening. There’s about a month delay between Chinese demand falling and seeing it hit Australian trade reports.
I watch Chinese steel production data - it directly hits iron ore demand. When their steel mills cut back, AUD typically drops within two weeks.