AUD/CNY tests June lows below 4.80 – Westpac

Economists at Westpac believe AUD/CNY is likely to see fresh multi-month lows in the near-term but expect the pair to move back up to 5.05 by year-end on broad-based USD weakness.

Key quotes

“AUD/CNY is testing lows since early June. Indeed since the Aussie crested early Sep in line with global equities, the yuan has risen 5.4% against A$, behind only KRW and TWD among major Asian currencies.”

“Short-term, AUD/China should remain sensitive to swings in sentiment, with plenty of uncertainty remaining over the US election and myriad other sources of volatility, so fresh multi-month lows seem likely.” 

“By year-end however, we expect US dollar trend depreciation to have resumed. This tilts AUD/China higher once again, returning to around 5.05.”