China’s Recovery Key to Aussie Rally

Aussie traders are expecting a recovery in China’s economy to lead to an increase in Australian exports which would give the economy a much needed boost.

Strong rallies in commodities and stocks helped fuel demand for higher yielding assets like the AUD USD. Traders are confident in buying the Aussie because of the improving Chinese economy and the fact that the Reserve Bank of Australia refrained from cutting its benchmark interest rate at its last meeting earlier in the week.

Traders are expecting a recovery in China’s economy to lead to an increase in Australian exports which would give the economy a much needed boost. This market also received a boost when news was leaked that the U.S. bank stress tests would indicate that the majority of U.S. banks have met their capitalization requirements.