Falling CNY sends out another AUD warning

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Another new low for CNY this afternoon:

The AUD has trended in lockstep with CNY since 2015, though the amplitude of the moves are larger.

The AUD can’t charge on in trend term if the CNY goes the other way because the falling CNY hammers EMs and commodities by making China more competitive across the board.

Needless to say, this time around it will not help trade tensions, either.

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That said, none of these relationships matter until AUD stops trading as a proxy for the S&P500.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.