Michael McDonough once again points to something interesting. The correlation between Aussie Dollar and China electricity consumption is quite high. Surprising at first glance, but should not be too unpredictable due to the close link between Australian economy and China.
The chart below shows AUDUSD exchange rate yoy (monthly) with China power output yoy (monthly). The correlation has increased in the past 5 years or so.
Source: FRED, National Bureau of Statistics
Of course, power output and consumption could be a good indicator of China’s economic activity (perhaps even better).
Source: National Bureau of Statistics
This article originally appeared here: Aussie Dollar And China’s Power Output
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