Less properties being bought in China may harm Australia’s economy, short AUD/USD?
China’s Citic Bank has halted new consumer loans in Beijing for individuals pledging their property as collateral, Bloomberg reported by quoting the people familiar with the matter.
- Citic Bank decided to halt the consumer loans for its own internal business reasons, rather than under prompting from Chinese regulators, according to the people.
- This is important asit may suggest Citic’s own perspective on the domestic housing market towards a less positive outlook.
- The chart below shows AUD/USD moving in tandemwith Shanghai stocks property index most of the time for the past six months; both started rallies since mid of December last year and peaked at the end of January this year.
AUD/USD (Orange line); Shanghai stocks property index (white line)
- Any prediction on less activitiesin Chinese housing market, if proved to be accurate, may add downward pressures on Aussie.
Fullerton Markets Research Team
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