The Premier of China Wen Jiabao claimed yesterday that the country’s economy is beginning to face pressure and this could lead to a slowdown in China that could continue for quite some time. The country has met its growth forecasts in recent times but to me often when a political statement is issued it can sometimes cause a lack of confidence in the short term. Over the last couple of weeks we have seen the AUD weaken against both GBP and USD and it keeps testing resistance levels on GBPAUD at almost 1.50. See the link for more information on this Chinese report http://www.bbc.co.uk/news/business-19279126
During the last quarter China’s GDP was measured at 7.6% which although was lower than measured previously it is still dramatically higher than that of UK, Europe and US combined! However, it is important to be aware that this was the lowest reading in three years. The longer term impact of the Chinese slowdown could mean a broad weakening of the Australian Dollar in the future. For me I think it’s only a matter of time before the Chinese slowdown affects things in Australia but the real question is how long. With the European Debt Crisis continuing to rage on and the LIBOR scandal with the UK banking sector we could be in for a volatile period when the economy gets going again in September. August is often a quiet month with a lot of industry grinding to a halt in Europe so keep in close contact with your currency broker who will keep you up to date with any major events over the next few days.
If you are thinking of moving currency and would like to receive commercial exchange rates on amounts from £5000 upwards feel free to contact me Tom Holian [email protected]