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The Chinese GDP And The Aussie

Written by A Forex View From Afar on Thursday, April 16, 2009

During Thursday’s trading session, the aussie was outperformed by every other major currency. So far, the main reason seems to be that demand for raw materials is likely to fall as the Chinese economy grew at a slower speed than expected.

“Commodities make up the biggest percentage of the Australian export market. As such, the aussie is very vulnerable to any change in the raw materials demand outlook.” TheLFB-Forex.com Trade Team members said. “Raw materials exports make up 35% of the balance of payments. Additionally, out of the top 10 merchandises exported by Australia, seven are raw commodities.” TheLFB-Forex.com Trade Team added

To further strengthen the case, China is the largest export market for Australian exports, so it is easy to understand why the weaker than expected Chinese Q1 GDP had the strongest effect over the Australian currency.

The Australian dollar lost 80 pips against the greenback, after managing to break above the Wednesday’s high during Thursday’s Asian session, while it lost 85 pips against the yen. However, the aussie’s positive days are far from over. The currency will rally when the commodity market actually starts moving higher.

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Fundies and Trading
There is a constant question from some traders as to why anybody would ever need to consider the ‘F’ word when trading. Fundamentals: what is so damaging at looking at both Technical charts and having a Fundamental filter to gauge how many Lots to put on? Why is it that accepting that Technicals give us price points to trade, but Fundamentals determine the direction that we travel is so difficult for some traders to accept? Without a Fundamental Filter very few pure Technical traders would have seen this Dollar move coming today.

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