Australian Dollar to Chinese Yuan exchange rate,
Plummeted overnight!
Take a look at this exaggerated decline, yesterday in one day, strictly speaking, in just a few hours, the Australian dollar against the yuan exchange rate from
1:4.79 down to 1:4.7!
You must know that after entering April, the exchange rate of the Australian dollar against the yuan has risen steadily.
Since April 2, the exchange rate of the Australian dollar against the yuan has steadily climbed from the original low of 1:4.69.
It rose to 1:4.78 in 4 days!
However, since April 5, the Australian dollar has fallen slightly against the yuan, from 1:4.78 to 1:4.74.
Since then, the exchange rate of the Australian dollar against the yuan has remained around 1:4.75, basically unchanged for 3 consecutive days.
Then there is the sharp rise on April 8, the exchange rate of the Australian dollar against the yuan soared all the way to more than 1:4.8, and the last time the exchange rate exceeded 4.8 was in January this year.
It's just that the good times didn't last long, and the exchange rate plummeted in an instant yesterday.
There is a high probability that the Fed will not cut interest rates
Inflation rebounded
The reason why the Australian dollar plummeted against the yuan yesterday was the latest news from the United States.
The Federal Reserve released the latest inflation data, first of all, the inflation rate rebounded to 3.5%, higher than the previous 3.2%.
Inflation rose at 0.4% month-on-month, which has exceeded market expectations for three consecutive months.
This also represents a lower probability of a decline in inflation in the United States.
A number of financial institutions have given forecasts based on Fed data:
A Fed rate cut in June is impossible!
Indeed, in the face of an uncertain inflation outlook, it is indeed difficult for the Fed to cut interest rates in advance, and some financial institutions even predict that under the current situation, the Fed will not only not cut interest rates in advance, but even the original plan to cut interest rates may be disrupted.
The prevailing view is that if the U.S. inflation rate remains at its current level,
The Fed will cut interest rates up to 1 time this year,
And it will take place at the end of the year!
Because of this news, because of the interest rate cut, the dollar exchange rate skyrocketed instantly.
As we all know, the US dollar exchange rate and the Australian dollar exchange rate are completely opposite, and the US dollar must fall when the US dollar rises, and vice versa.
So yesterday the Australian dollar also plummeted against the US dollar.
Looking at the exchange rate chart, the decline in the Australian dollar against the US dollar yesterday was basically the same as the decline in the Australian dollar against the yuan.
If the Fed really decides not to cut interest rates in June in the future, the dollar exchange rate will rise again, and the Australian dollar exchange rate will also fall.
Now, seeing that the inflation rate in the United States has rebounded, everyone is more worried about the change in the inflation rate in Australia, and if the inflation rate also rebounds similarly, the RBA may also make a similar decision as the Fed.
The Reserve Bank of Australia does not cut interest rates, which has a much greater impact on everyone than the exchange rate change, and the exchange rate only affects a small number of Chinese and international students who need to exchange currency at most, but the Reserve Bank of Australia does not cut interest rates, which affects all Australians!
Chinese investment in Australia has plummeted
A record low
The future will fall...
There is also a news that has a certain impact on Australia related to China. Just recently, the Australian official released a data:
Chinese investment in Australia
Plummet!
According to an authoritative survey report, China's total investment in Australia will decrease by 37% in the whole year of 2023.
This is the lowest value in the last 20 years!
If you look at the histogram of China's investment in Australia, we can see that the amount of Chinese investment in Australia in 2023 is basically the same as in 2006.
What kind of concept is this, the times are developing, the currency is inflating, and the value of 2006 may be doubled now...
The low figures during the pandemic are understandably low, as there would have been little investment due to border lockdowns. The data does show this trend, and since 2019, Chinese investment in Australia has been declining year by year.
But 2023 is different, borders have been lifted and globalization has resumed. However, Chinese investment in Australia remains low.
This may have something to do with the rigid relationship between China and Australia at the time, after all, it will take time for the Labor government to restore the relationship between the two countries.
Another point is that the decline in Chinese investment in Australia is also related to Australia's own restrictive policies.
The Australian government has tightened restrictions on foreign investment, severely restricting China's entry in many sectors such as infrastructure and minerals.
However, slowly, the data may be different, under the recovery of Australian tourism, Chinese tourists have begun to return, trade between Australia and China has also gone further, and tariffs on red wine have been abolished, and China and Australia may have more in-depth cooperation in trade in the future.
The Australian trade minister also revealed that he hopes to increase the trade volume between the two countries by another 100 billion Australian dollars!
It is hoped that as the two countries continue to improve, the cooperation between the two countries will become deeper and deeper.