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At the start of the week, commodity currencies got a bump. This came after the PBOC reduced reserve requirements for banks (RRR as it’s known). This highlights the importance of the Chinese credit situation in forex, and why traders ought to keep track of it.
Japan, New Zealand and Australia, in particular, are intimately related to their largest trade partner, though in different ways.
Chinese authorities have been taking a series of measures in an effort to offset the economic impact of the ongoing trade war with the US. Many of these are related to credit and loan capabilities. Therefore, they are directly related to how much Chinese businesses, consumers and individuals can buy or invest from other countries.
Chinese investors were the drivers of the real estate boom in Australia. And the collapse of it is what precipitated the decline in the economy and the change in outlook by the RBA.
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