The Australian dollar saw some wild swings last week, as the fallout from the Chinese devaluation will absolutely impact any nation with strong trade links to China.
As nearly all Australian iron ore heads towards China, Australia’s miners will no doubt be impacted by this move. The AUD$/US$ hit a 6 year low at A$0.7219, in the immediate aftermath of the PBoC decision, before making a strong recovery.
On Tuesday the Reserve bank of Australian left its interest rate unchanged. It did, however, drop its familiar rhetoric that a lower Australian dollar is both likely and necessary. This omission was taken as a buy signal by the market, although any rally was short lived following a disappointing jobs data release, showing the Australian unemployment rate rising to 6.3% up from 6.1%.