Here are the most vulnerable currencies from China's possible slowdown



Amid worries over China’s economy, some currencies — particularly those of commodity-producing countries — will be most vulnerable to its slowdown.

Experts say that two currencies stand out as being the most exposed to China: the Australian dollar and the New Zealand dollar.

China is the biggest trading partner of both countries, with 24.9 percent of New Zealand’s exports and about a third of Australian exports going to the Asian giant.

Flattening demand from China — the world’s top consumer of iron ore — is also set to weigh on Australia, the world’s largest iron ore exporter.

The experts expect the largest falls to occur in the Australian and New Zealand dollars. This is due to their exposure to China’s economy, which we forecast to continue to slow, and in the case of the Australian dollar to its reliance on exports of iron ore and coal, which we think will be among the worst performing commodities this year.

When commodity prices decline, the amount of money paid for that country’s exports also goes down — leading to a depreciation of its currency, and vice versa.

Growth in the world’s second-largest economy cooled to 6.6 percent last year— the slowest in 28 years — from 6.8 percent in 2017.

Currencies at risk
The Canadian dollar is another commodity-linked currency that could also come under pressure.
In a hypothetical scenario where oil hits the floor on fears of reduced demand from China, then other commodity-linked currencies that are at risk to feeling the brunt of the pressure include the Canadian Dollar and even the Russian Ruble. Asian currencies that could be susceptible to Chinese economic concerns would include the Malaysian ringgit, Indonesian rupiah and Singapore dollar.

Australian dollar is most at risk among commodity-linked currencies, as it follows the “general trend of global risk appetite” more than its domestic economy.

Only a trade deal between the U.S. and China — who have been embroiled in a tariff battle since 2018 — could save those at-risk currencies, experts said.

These currencies will remain vulnerable to sudden shifts in direction for as long as the political landscape in the global context remains subject to sudden changes.

Source: CNBC

 Trader Georgi Bozhidarov

Read more:

If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information.
Varchev Finance


25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256

Universal numbers

World Financial Markets - 0700 17 600    Varchev Exchange - 0700 115 44

Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.

Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006

The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.


CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

chat with dealer
chat with dealer
Cookies policy