Does Beijing really have the power to lift up the Australian dollar?

While global markets watched closely for another joint move by Washington and Tokyo to prop up the Japanese yen this week, Australian dollar traders have been laser-focused on the actions of another economic power: China. Some analysts view the Australian currency as particularly sensitive to policy moves in Beijing. If China intervenes to boost domestic growth, that could also lift the Australian dollar, the theory goes. At first glance, the Australian dollar “appears among the most China-sensitive” of the G10 currencies, a basket of the world’s most heavily traded currencies, according to Lexi Kanter, an analyst at the investment bank. However, much of the apparent connection between the Australian dollar and the yuan reflects their shared response to broad movements in the US dollar rather than a purely China-specific signal, according to Kanter.