It has been a busy week for news out of China starting with the Chinese Government devaluing the Yuan on Tuesday and Wednesday in an attempt to energise its economy by making Chinese exports cheaper to foreign customers. On both occasions the Australian dollar immediately fell also against the USD as the FX markets kept the Chinese- Australian cross rate as the same levels (meaning the Chinese imports won’t be cheaper for Australia).
For many commentators the devaluation was also seen as a signal from the Chinese Government that the problems in the Chinese economy are probably worse that the official statistics report.
Then on Thursday night a massive port explosion in Tianjin made the news with censured reports about the cause and death toll.
The Australian Dollar currently trades at 73.7.
Please find the following for your perusal;
****DJ Copper Sinks to Six-Year Low on Fears of Weaker Chinese Demand**** By Tatyana Shumsky
Copper futures extended their six-year low on Monday as renewed concerns about weaker demand for the industrial metal from China spurred investors to sell holdings.
The most actively traded contract, for September delivery, fell 3.05 cents, or 1.3%, to settle at $2.3210 a pound on the Comex division of the New York Mercantile Exchange. This was the lowest close since July 2009.
Copper prices have marched lower in recent months as investors wagered that China’s economic problems were worse than previously thought. China is the world’s largest copper consumer, and traders worry that slower manufacturing and construction activity there will translate into smaller copper purchases.
Last week, copper prices pulled lower after China shocked markets by devaluing its currency. The policy move aimed to buttress economic growth, but many market watchers worried it signalled that the economy is experiencing a more pronounced slowdown.