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Aussie dollar helped by Chinese property investors

Investors from China are helping to support currency and economy in Australia.
The new levels of demand seen in recent months from Chinese investors for Australian property has helped to provide a boost at a time when the dollar has needed supporting, it has been reported.

Greg Gibbs, FX Strategist at RBS told FX Street that it is new type of economic investment for Australia, which has helped to boost the dollar at a time when the mining industry has started to lose a bit of investment.

"This has stopped downward pressure on Australian interest rates. Low rates in major countries, low inflation, further policy easing expectations for the ECB and BoJ, and lengthening expectations before US policy tightening, has renewed carry trade momentum. This is generating renewed demand in the Australian dollar," he added. 

Mr Gibbs went on to say that fears of property overheating were largely being over exaggerated, thanks to the fact that there are many young people who cannot afford to buy, which raises mainstream concerns. 

He said that the RBA has downplayed fears of property prices overheating, adding that they are characteristic of a market experiencing a period of strength.

Posted by Craig Francis

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