Australia seeking to expand Australian dollar to yuan trading

July 9, 2012 by · Leave a Comment
Filed under: Currency News 

If you have been following our posts, we have covered other countries like the BRICs working on deal to do yuan-based commodity denominated deals.    This is just latest one of these deals.   Being that Australia is so geographically close this makes sense and we will see all countries in that east Asian region do the same over time.   This is a serious challenge to U.S. dollar hegemony.   China is growing and they are taking plays for the American play-book during our industrial rise that peaks after WWII.

Something has to give, I can not see how long U.S. politicians and regulator are going to allow this behavior while China basically operates a closed market and undervalues it currency.   This could even be considered economic warfare in some circles.   I think it is good that we are forced to play nice with other but at the same time, others need to be also brought forward to account for their actions.   I believe some form of protection for native markets is not a bad thing, just as I believe other countries should focus on building their local markets and consumption.

Yes, we need to develop parts of the world so they have better footing, but at a point, national interests are still very important and need to be addressed if we are going to continue this globally competitive world.   If not, we will see more conflict that could turn into more shooting wars or hardcore economic warfare.    That is not a good scenario for any0ne.    If the U.S. good just get to the fact that there is no free lunch and start making the hard choices so we are not so vulnerable to these changes like the ones mentioned in this article.

Business Day – Australia is seeking to deepen trading between the local dollar and the yuan as demand for commodities drives exports to China to record highs.  The yuan’s internationalisation “is clearly in the interests of Australian businesses and the broader Australian economy,” Treasurer Wayne Swan, who will co-host a forum on the matter in Hong Kong next week, said today in a statement. “Both governments are very keen to see us deepen and broaden this important market.”

China remained Australia’s top trading partner in May, with transactions climbing to $11.1 billion, the most since October, according to figures released today by the Canberra-based statistics bureau. Japan last month started to use its currency in direct trading with China.

The Aussie dollar, the world’s fifth-most traded currency, bought $US1.0257 in afternoon trading, up from $US1.0276 yesterday. It has climbed 46 per cent against the greenback since the start of 2009, the most among more than 150 currencies tracked by Bloomberg.

The Australian dollar surged as demand from China and India for the nation’s resources set off a record mining boom.  The People’s Bank of China didn’t immediately respond to faxed questions seeking comment.  The central banks of China and Australia signed $30 billion currency swap agreement to ensure the availability of capital between the trading partners, the Reserve Bank said in March.

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