The move by China to reignite its export business took a turn as the Aussie and the Kiwi dollars weakened significantly when traders attempted to short both these currencies. The Australian economy is particularly vulnerable with China being its biggest trading partner and thus is seen as proxy. AUDUSD is down -0.9% for the day already and since yesterday has declined -2.3% to trade near the lows of 0.723. The surprise move from China comes as import/export data remains weak alongside a sluggish inflation. China had already lowered its GDP forecasts for the year and came under pressure as the Chinese equity markets turned bearish in the recent months. Previous rate cuts from the PBoC in an attempt to stoke inflation have also yielded little to no results.
Asian Currencies Remain Weak on Yuan Devaluation
Daily Analysis - 12/08/2015