The Aussie dollar made a new 6-year low this morning of 0.7216 against the US dollar after the Chinese currency fixing saw authorities allow yesterday’s 1.85% devaluation to be followed with another 1.6% move today.
That’s left the Yuan Reference Rate at 6.33 this morning from 6.2298 yesterday.
Reuters reports that the Central Bank’s chief economist, writing in the People’s Daily, said China was not about to embark on a devaluation trend. But given that the Central Bank said yesterday it would let market forces play a larger role in the currency’s pricing, many traders and commentators remain skeptical.
That has meant that once again the Aussie dollar has played the role of liquid USD/Asia proxy with the sellers pushing it to the lows before some buying emerged. At 0.7246, it’s down another 0.78% on where it was at 7am.
Here’s the chart: