How AUD & NZD Exchange Rates Are Impacted by China’s Economy

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A macro forex guide exploring how to trade the New Zealand and Australian Dollars – and why they are tied to Chinese growth – through the prism of the Core-Perimeter model.

AUD and NZD Analysis, China Trade Relations With Australia and New Zealand, Understanding the Core-Perimeter Model -TALKING POINTS:MORE MACRO FOREX TRADING GUIDES IN THIS SERIES) both tend to do well when global risk appetite is elevated, and when investors feel good about prospects for global growth. However, while both can and do rise when investors are buoyant, the specific issue of China’s growth tends to be especially important.

In general, they are more vulnerable to external shocks than ones that rely on internal demand to power growth. Under these circumstances, NZD and AUD tend to weaken along with other growth-oriented assets as core demand for exports from the perimeter is anticipated to decline.

Australia and New Zealand are broadly raw-material exporting economies, which makes investors’ global growth assessment as important to their direction as their own domestic dataLeveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Forex trading involves risk. Losses can exceed deposits.

 

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