News Archive
2008
- December [1]
- November [1]
- October [1]
- September [2]
- July [1]
- June [1]
- April [1]
- March [1]
- February [1]
- January [1]
2007
- December [1]
- November [1]
- October [3]
- September [7]
- July [6]
- June [5]
- May [1]
- April [2]
- March [5]
- February [1]
2006
- December [1]
- November [3]
- October [1]
- August [1]
- July [1]
- June [3]
- May [2]
- April [3]
- March [3]
- January [5]
2005
- December [1]
- October [3]
- September [2]
- August [1]
- July [2]
- June [3]
- May [6]
- April [3]
- March [3]
- February [1]
- January [3]
2004
China Weighs Heavily On Decline
The Age
Wednesday March 22, 2006
THE Australian dollar's decline is not just the result of a rising US dollar, but a slip in the currency's value when measured against major trading partners.
While the Australian dollar's value is usually reported in US dollar terms, the trade weighted index shows that China's yuan is a more relevant currency. The Reserve Bank prefers to gauge the Australian dollar using a weighted average of 23 trading partners to produce the TWI. Countries that are more important as trading partners get a higher weighting in the TWI's "basket" of currencies. The weights (totalling to 100) are calculated by the RBA every September, based on total trade volumes (merchandise exports plus imports). Since October 2002 the US dollar has slipped from the second biggest currency in the basket (with a weighting of 15.1) to the fourth biggest (with a weighting of 11.9). Over the same period, the yuan has moved from fourth position into third place, reflecting China's growing importance as a trading partner. Last financial year, almost $33 billion worth of merchandise trade flowed between Australia and China, compared with two-way trade worth about $31 billion between Australia and the US. A year earlier, two-way trade between Australian and China was $25 billion, compared with two-way trade worth $29 billion between Australian and the US. The yen remains the most important currency in the TWI.
© 2006 The Age