Recently, the exchange rate of the Australian dollar against the Chinese yuan has been like riding a roller coaster.

 

On May 1, the Australian dollar opened with a big drop against the Chinese yuan:

Within 12 hours, the Australian dollar fell from a high of: 1:4.732 to 1:4.682 against the Chinese yuan, record low in the week;

 

But immediately on May 2, the AUD/CNY rate recovered to 4.7339.

 

 

Why is there such a float?

 

Panda found some reasons by checking recent information ......

 

Federal Reserve is the key to AUD rate back up

 

In the early morning of May 2, Australian time, the Federal Reserve officially announced its interest rate decision.

 

Fed Chairman Powell said at a press conference that, it would take more timer than originally expected to gain confidence on the issue of interest rate cuts.Short-term inflation expectations had risen, but the next step was unlikely to be a rate hike.

 

 

As a result of Powell's word, the market presented another optimistic mood that the option of a rate hike had not been ruled out.

 

The three major US stock indices then instantly staged a huge turnaround, before finally closing lower.

 

After Powell's dovish remarks, the Australian Dollar exchange rate also rose.

 

The AUD/USD went back on 0.65, and AUD/CNY also rose sharply above 4.72, growing by 1% compared to the previous day's low point.

 

RBA to raise interest rates 3 times, the official cash rate may up to 5.1%

 

And for the interest rate, what is the current situation in Australia?

 

The RBA's recently released inflation data shows that the inflation rate rose in March this year compared to the previous, from the previous 3.4% back to 3.5%.

 

 

Don't underestimate the 0.1% rebound, which represents a pickup in Australia's inflation rate.

 

Although the overall figures are not far from the 2%-3% target range previously set by the RBA, once inflation rebounds, it is important to find ways to curb it.

 

And the only means to curb inflation is to raise interest rates.

 

So, some experts give predictions that the RBA will not only not cut interest rates this year, but will once again raise the official cash rate, and more than once...

 

 

Experts’ view is that the RBA will raise interest rates three more times this year, allowing the official cash rate to reach 5.1%, which is the only way to completely control inflation.

 

Although the interest rate hike affects Australia's economy, also makes people's lives more stressful, but experts believe that, relative to other developed countries, Australia's interest rate hike is not so large, still leaving some room for interest rate increases.

 

The official interest rates in the United States, New Zealand, Canada and the United Kingdom are all higher than or around 5%.

 

Compared to the impact of inflation, the consequences of interest rate increases are more acceptable.

 

The Australian dollar exchange rate rises with every rate hike, and this one is no exception. After many experts gave their predictions plus the RBA's data was released, the AUD/CNY exchange rate started to go way up.

 

The situation is exactly the opposite of the previous prediction of a rate cut.

 

If the RBA really raises interest rates again this year and does so three times, the AUD/CNY exchange rate could see an even bigger boost, and is even expected to break through 1:5...

 

 

Despite the recovery in the AUD FX rate, this is not good news for Australian debtors, nor for the Australian public at large, given the current situation in the US and Australia. It looks like the Australian public has a long time to get through before the RBA cuts interest rates...

 

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