Chinese Stimulus strengthens Australian Dollar (Tom Holian)

Will Sterling Weakness Continue to Help the AUD to GBP Rate Improve?

Following the rumours over the last few months the Chinese have announced plans aimed at solidifying their economic growth.

Plans will include development of the train network, roads and airports which will help to increase communication and travel between Shanghai and the surrounding inland provinces.

The central bank in China will also look to increase lending to banks in order to improve exports. With Chinese growth having slowed to 7.4% in the first quarter of  2014 down from 7.7% in the previous three months it was only a matter of time before the Chinese bank intervened.

The GBPAUD exchange rate moved by almost as much as 30% during 2013 which followed a similar pattern to the slowdown in China. With the economy in China now looking to improve then we could see the Aussie Dollar gain against Pound as this news filters through to exchange rates.

Two months ago the Chinese government said it will look to cut taxes for small firms and speed up the building of new railway routes across the country.

Chinese retail sales are due out in the morning with expectations for 12.1% year on year for May so anything better could see further Australian Dollar strength.

If you have a currency transfer to make and want to save money on exchange rates then contact me directly Tom Holian teh@currencies.co.uk