The Australian dollar hit a nine-month low against the US dollar Monday.

• The Australian dollar has hit a nine-month low
• There are growing concerns about the health of China's economy
• Global investors are on edge as another major Chinese investment firm shows signs of stress

It fell to 64.59 US cents before recovering in afternoon trade to 64.8 US cents.

“The Aussie has fallen four weeks in a row, battered by the RBA’s dovish turn, angst over China and a solid US dollar,” Westpac senior currency strategist Sean Callow said.

“It is at risk of a slide below 64 cents if investor concerns deepen over China’s property market or the July {economic} activity data disappoints {investors} (due 12pm, Tuesday).”

There have been concerns over China’s economic strength for some time.

“Chinese economic data continues to disappoint,” AMP’s chief economist Shane Oliver noted.

“Bank lending and credit came in much weaker than expected in July and the slump in exports and imports worsened with exports down 14.5 per cent year on year and imports down 12.4 per cent year on year with the latter indicating weak domestic demand. 

“Meanwhile, China slipped back into deflation [or falling prices] with the CPI down 0.3 per cent year on year and producer prices down 4.4 per cent year on year.

“It’s not quite as weak as it looks as core CPI inflation [which strips out volatile items] edged up slightly but it’s still weak.

“Despite ongoing indications of soft growth, details of actual policy stimulus remain weak and policy announcements have been modest,” Dr Oliver said.

In other words Dr Oliver is concerned the Chinese Communist Party hasn’t yet acted decisively enough to arrest concerns about the health of the world’s second biggest economy

And now there have been fresh worries about a Chinese asset management firm, Zhongzhi Enterprise Group.

It has about 1 trillion yuan ($US138 billion) in assets under management.

Two of its clients have reported the firm delayed payment of maturing wealth products.

In simple terms that means investors are overdue to receive income from their investments.

It suggests this large investment firm is running short of cash.

The Australian dollar is also under pressure as commodities prices, including iron ore, fall in value.

The stock exchange’s largest mining companies including BHP, Rio Tinto and Fortescue Metals Group all fell near or over 2 per cent today.

It helped drag the S&P/ASX200 down 0.86 per cent by the close of trade.

A “risk off” financial trading environment is developing across the globe, which is a fancy way of saying international investors are nervous about the foreseeable future and that has put downwards pressure on the Australian dollar.

The local currency is seen as a barometer of investment risk globally.

https://www.abc.net.au/news/2023-08-14/australian-dollar-slides-china-economy/102728226

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Australia's wine glut could fill nearly 860 Olympic swimming pools as the industry struggles to recover from a trade ban with China, according to Rabobank.

• Australia's wine glut has grown to the equivalent of 2.8 million bottles
• Since China's anti-dumping tariffs, Australian wine exports have contracted by 33 per cent
• As prices remain low, more vineyards are tipped to hit the market

In a new report, the rural lender paints a bleak picture for Australia's wine industry, where even the early removal of steep Chinese tariffs would still see the industry take another two years to get back into balance.

China was Australia's most valuable export market in 2020, but a year later, anti-dumping tariffs effectively ended the lucrative trade.

At the same time, exports to the United Kingdom also dropped off after hitting a peak in 2020, as the economy opened back up after COVID restrictions and people drank less at home.

China's anti-dumping tariffs ranged between 116.2 per cent and 218.4 per cent on bottled wine and saw a trade worth $898 million in 2020 trickle to just $8.1 million in the year to June 2023.

The overall value of Australian wine exports to all markets has dropped by 33 per cent over the past two years.

The tariffs are subject to a dispute before the World Trade Organisation.

Just as exports were drying up, grape growers were experiencing some of their best vintages, adding more wine into market with fewer places to sell it.

https://www.abc.net.au/news/rural/2023-08-15/chinese-tariffs-cut-value-australian-wine-stockpile/102728080

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The sliding Russian currency reversed losses late on Monday, rising back to the strong side of 100 against the US dollar, after the country’s central bank announced an extraordinary policy meeting set for Tuesday. 

The ruble was trading 0.8% higher at 98.5 against the US dollar and at 107 to the euro at 5:44pm local time in Moscow. Earlier in the day, the ruble hit a 16-month low of 101 and 111, respectively. 

The rebound follows an announcement by the Bank of Russia that it had called an emergency key rate meeting for Tuesday, vowing policy makers would publish a statement afterwards. 

The regulator, who’s next scheduled interest rate decision had been planned for September 15, hiked the key rate by a percentage point to 8.5% last month, citing rising inflation. Prior to that the rate had remained unchanged for several consecutive meetings since last October. 

The central bank assured on Monday that the ruble’s depreciation poses no risks to Russia’s financial stability, while President Vladimir Putin’s economic adviser, Maksim Oreshkin, said he expects the Russian currency to stabilize.

https://www.rt.com/business/581263-russian-ruble-rebounds-central-bank/

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