Evidently the Chinese economy is adjusting to the housing overbuild and that's obvious from the drop in our IO & Met Coal (Steel materials) export prices to China. That in turn is reflected in the dramatic drop in value of the AUD which is predominantly a commodity currency.
IMO this is a temporary blimp for China (low IO & Met Coal prices stimulate Chinese manufactured exports) but a more serious economic problem for Aus because the drop in the AUD is highly inflationary due to our dependance on imports. We can expect a price spike in our big ticket items such as cars, machinery, oil and consumer goods over the next 6 months IMO. And for those who are hedging against the AUD (ie via Gold) then congratulations.
