AUD/CNY rolled over from above 4.80 in early November to a 4.55 handle end-month, printing lows since May 2020. Economists at Westpac expect the pair to resume its decline in the first quarter of 2022.

AUD/CNY to chop around 4.57 into year-end

“Rising commodity prices may be one reason for China’s increased tolerance of a stronger yuan, which is obviously a positive for AUD. But if the FOMC speeds up tapering in December as we expect, USD should strengthen, hitting AUD harder than CNY, despite Australia’s post-lockdown economic recovery.”

“We look for AUD/CNY to chop around 4.57 into year-end, resuming its decline in Q1 2022 to 4.51.”