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Aussie Dollar Profits From Optimism Towards China

February 16, 2010 at 2:08 by Jan Baros

Australian dollarEven if China’s new domestic economic policies have been impacting markets negatively since the the beginning of the year, the Australian dollar managed to climb slightly versus important currencies today as analysts affirm that the Asian economy will continue to grow despite new restrictions imposed by Chinese central bankers.

Australia is one of the main raw materials suppliers supporting China’s economic boom, and Chinese new bank loans reserve requirements have been affecting the Aussie’s rate as traders expected demand for South Pacific commodities to decline but, today, the Aussie managed to climb versus most of the 16 main traded currencies as important financial institutions, such as Goldman Sachs Group Inc. maintained their growth outlook for China, despite new lending laws created by central bankers, suggesting that the Asian nation dynamism will prevail despite new restrictive measures.

Australia is, to some extent, a “hostage” relying on the Chinese economic development to maintain its own nation’s growth, as commodities exports account for a significant amount of the country’s revenue, and forecasts indicating that China will continue to grow at a fast pace are definitely positive news for the Australian economy and currency.

AUD/USD traded at 0.8896 as of 23:15 GMT from yesterday’s opening rate of 0.8874.

If you have any questions, comments, or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.

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