The Australian Dollar has continued its recent run of form as China announces more plans to allow foreign investors to invest in the country. The aim is to promote economic growth and they have said they will raise the quota for the ‘Qualified Foreign Institutional Investor’ (QFII) once the limit of US$80bn has been reached. This is the second time already that China has increased the amount. For large institutions they have allowed them previously to invest as much as US$1bn but now they’ve announced that this will also be increased. With the news of China being taken as positive the Australian Dollar has strengthened against Sterling to 1.5240 on mid-market levels.
The Chinese Yuan has also strengthened which has seen both the AUD and NZD remain strong from last week and the AUD has hit a 6 week high against USD. Chinese data from over the weekend showed that trade surplus is the highest in 45 months during October, yet another reason for AUD strength. With news that the Japanese economy has shrank by 0.9% in the third quarter this has seen a sell off from YEN with investors looking for other opportunities including Australian Dollar.
Watch out for tomorrow’s Inflation Data for the UK out at 930 UK time which could provide a sharp movement on GBPAUD exchange rates. Year on year figures expect to be 2.3% so anything higher could see Sterling have a small fight back against the AUD so if you do have a requirement to transfer Australian Dollars contact me directly to see how this data release might affect exchange rates. Tom Holian [email protected]