The Aussie Dollar/China Market Connection

You're in this constant state of flux and transition, as if you had jet lag all the time. The acting part of it is easy. It's all the other things that come with it that are a bit difficult. --Don Johnson

With the Australian dollar touching four-month highs as the Reserve Bank of Australia holds interest rates, I thought it might be worth addressing the implication currency strength might have on China's equity markets. As global markets have stabilized, the central bank has been hesitant to cut rates further given inflation prospects and an apparent overreaction to the slowing Chinese economy. The Aussie dollar gave a strong risk-on signal as money pushed into the currency beginning around the June low in risk assets, as deflation expectations began to top. Interestingly enough, perhaps the better way to play the Aussie dollar now is to play Chinese stocks....159 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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