There are plenty of investors who think betting on China is as close to a sure thing as there could be the only problem is that invest directly in economic freight train of China is complicated, opaque and sometimes impossible. The Chinese Government maintains strict capital controls, prohibits foreigners from owning directly certain types of investment vehicles and prevents the Chinese Yuan enjoying too quickly, if at all. For those who want exposure to China without all inherent risks, there is an alternative legal: the Australian dollar (AUD).
Those of you who regularly read my posts and/or follow the forex markets closely should be aware of the many correlations between the currencies and other financial markets, as well as between the currencies. In this case, that there seems to be a strong correlation between Chinese economic growth and the Australian dollar.If the Chinese Yuan was able to float freely, it can rise and fall in line with the AUD. once the yuan is fixed to the US dollar, however, we must look for a connection more roundabout. Analysts HSBC Chinese used electricity consumption as a proxy for the Chinese economic activity (because they do not use only GDP is still unclear to me) and discovered that he floated in perfect accordance with the Australian dollar.
No comments:
Post a Comment