The Australian dollar hit a new 6 year low today after the Chinese government unexpectedly devalued their currency devalued their currency for the 2nd time this week in order to kick start the economy.
The local currency hit a low of US72.15c within 1 minute of the announcement before recovering to around US73c by late afternoon.
The Chinese government described the 1st devaluation earlier in the week as a one off move so the 2nd one sent shockwaves through world markets with investors flocking to the US dollar.
The move will keep investors on edge, as another devaluation is now not off the cards, which will keep pressure on the Aussie dollar in the foreseeable future and may also cause more problems for Australia’s overvalued housing market.
Investment from China in Australia’s property market is already at record levels and if the Chinese feel that the Yuan will devalue further there may be a rush to convert the currency to purchase property which will only further inflame the housing sector.Publication source