Yesterday’s price action in the currencies versus the dollar was a drag, man… We did, however, see the higher yielding currencies begin to move away from the pack of currencies led by the euro (EUR). That move higher by the likes of Australia (AUD), Brazil (BRL), South Africa (ZAR), and others, carried over through the overnight sessions, so, as we start today, they are stronger versus the dollar… In fact, the Aussie dollar is near a 7-week high this morning.
Another thing helping to boost the Aussie this morning was the news overnight that China reported that exports had increased the most in three years, last month… For those of you keeping score at home… That’s a 46% increase in exports during February for China! Now… I can hear some of the new readers saying, what in the world do China’s exports have to do with the Aussie dollar rising? Ahhh grasshopper, come sit…
You see, Australia is a raw materials (commodities) rich country, which supplies China with all the raw materials they need to build their infrastructure. When China slowed down, it caused a chain reaction to Australia… But… As we’ve seen in the past nine months, China was the first to come out of the economic slowdown, and this report confirms that they are hitting on all 8 cylinders right now… So, as the old saying goes… What’s good for the goose is good for the gander… And what’s good for China is good for Australia!
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