Australian Coins
The Australian Dollar has soared to its strongest level since September 2008 against the Japanese Yen and hit a three-week high against the US Dollar.
The currency’s increase in strength comes after China, Australia’s biggest trade partner, smashed its trade deficit expectations and broke the record for the amount of imports it bought.
“The Chinese data is a whole lot better than anyone expected with both imports and exports accelerating,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “That will only add to recent investor optimism that the Chinese rebound has got legs and should take the Aussie dollar higher.”
Chinese exports rose by 14.1% from the previous year in December and imports increased by 6%, creating a trade surplus of $31.6 billion. Economists had only been expecting an increase of 3.5% for imports.
The strong showing from the world’s second largest economy is an encouraging sign that the global economy’s recovery is gaining momentum.
“The export data especially is very good news as it shows that external demand for Chinese products is picking up,” Dariusz Kowalczyk, a senior economist at Credit Agricole-CIB in Hong Kong, told the BBC.”A slowdown in global demand had been one of the biggest concerns for China, and this does help alleviate some of those fears.”
The Chinese economy may be on the right track to a strong recovery and with optimism growing the Australian Dollar as well as its relation the New Zealand Dollar could both make further gains. China also posted a strong increase in manufacturing activity with it increasing for a third month in a row in December.
China still faces challenges from some of its major trading partners. The Eurozone, one of China’s biggest export markets is still trying to curb its debt crisis but still has no end in sight, the impact of which has damaged demand for Asian exports.
“If you look at the fundamentals of the US and Europe, this could be a temporary rise,” said Ma Xiaoping, an economist at HSBC in Beijing.
The Pound to Euro exchange rate is currently trading at 1.2252
The Pound to US Dollar exchange rate is currently trading at 1.6044
The Pound to Australian Dollar exchange rate is currently trading at 1.5172
The Euro to US Dollar exchange rate is currently trading at 1.3091
The Euro to Pound exchange rate is currently trading at 0.8159
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