The Australian dollar had a rest during the weekend, but when trading resumed in New Zealand and Australia early in the week, so did the falls.
AUD/USD is trading around 0.8730, a new low since February and ever closer to the cycle lows.
The week opens as PIMCO, with Bill Gross out of the firm, saying that Chinese growth is likely to slow down to 6.5% and not the desired 7.5% target.
And if the Chinese government says otherwise, a research using the Li Keiqang Index shows the weakest growth in China since the outbreak of the financial crisis. This index is based on electricity consumption, railway cargo and bank lending. Li is currently the Chinese PM and he reportedly said back in 2010 that Chinese GDP figures are man made and that he relies on these three measures.
China is Australia’s No. 1 trading partner and any worries about slowing consumption of Australian commodities by China always sends shivers.
In addition, we are seeing a resumption of the dollar advance also in other currencies, so this new low of 0.8726 for AUD/USD is not only and Aussie story at this point. The cycle low is 0.8660. Here are 5 reasons why AUD/USD could fall to 0.75 according to Dr. Doom..
And here is the chart below:
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