Aussie dollar hits nine-month low as China worries grow

The news: The Australian dollar has hit at nine-month low, trading at around USD0.645 on Wednesday afternoon as most major currencies continue a roughly month-long decline against the greenback.

The numbers: The Aussie has lost around 6.5% against the US dollar since mid-July, dropping alongside the yuan (-2%), the yen (-5.5%), the Euro (-2.82%) and the pound (-3.15%).

The context: On 17 July, China unveiled a 6.3% GDP figure, well below the forecast 7.1%, dampening hopes of a rapid post COVID rebound for the world's second largest economy. With no sign of stimulus from Beijing, a surprise rate cut this week and rising commodity prices stoking inflation fears, liquidity has been flowing towards the traditional safe haven of the greenback. The DXY dollar strength index has lifted roughly 3.5% since bottoming out at a 14 month low in mid-July, and is holding 6-week highs at around 103.