AUD rates continue to come under pressure against most of the major currencies, with the economic problems in China continuing to handicap any market improvements for the AUD.
The economic problems in China have been well documented and the sharp devaluation of their currency, along with the crash in their stock market has thrown the markets into chaos. The Australian economy and ultimately the AUD have been most affected by this due to their heavy trade links with China. Australia relied heavily on the export of its raw materials and with this sector of their economy struggling, it is no real surprise to see the AUD losing value.
Add to this the Reserve Bank of Australia’s (RBA) commitment to lowering the value of the AUD and many clients are questioning how the AUD will ever find any sustained market support. Whilst we will eventually see a turnaround I cannot see this happening any time soon and with continued poor data overnight in the form of their latest Retail Sales figures, I would be tempted to sell off any AUD positions and not gamble on an increasingly unpredictable and volatile market.
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