AUD/USD rose a half-cent to 0.7325 in early US trading, only to give it all back
The Australian dollar has slumped to the lows of US trading at 0.7277 after rising as high as 0.7325.
The pair rallied on worries about US GDP after soft shipments numbers in the US durable goods orders report but it has skidded all the way back.
All the talk in markets today is about China. Essential viewing in US trading (especially for AUD traders) at the moment are US-listed China ETFs like FXI. The ETF bounced in early trading but it's back near the lows of the day, along with US stocks.
The turning point this week will hinge on the Fed. The market is terrified, at the moment, of a hawkish statement. At the same time, Chinese stocks and AUD are demanding more from China.
MNI takes a closer look at China and Capital Economics makes a good point:
Capital Economics economists stressed that such sizable stock market swings in China are more often the rule than the exception.
"Moves of five-plus percentage in either direction are not uncommon and the bigger picture is that the market is still up by 15% since the start of the year and 75% since a year-ago," they said.
Of Monday's tumble, "while some reports have blamed the latest decline on weak economic growth, our 'China Activity Proxy' shows a slight improvement in the most recent data," the economists said.
They reminded also that "changes in the price of shares listed on the Chinese mainland do not tend to be grounded in macroeconomic developments."
