China’s Commerce Ministry has announced plans to boost consumption and revive overall demand. The main strategies include increasing imports, expanding services, and implementing policies that directly reach households. The government will also work to eliminate restrictions and promote the purchase of new home appliances. However, these plans have not yet had any noticeable effect on the Australian Dollar (AUD).

AUD Performance

The AUD/USD pair is performing steadily, trading 0.3% higher at around 0.6640 during Friday’s European session. The Australian Dollar is the strongest against the US Dollar among major currencies. Recent statistics show the AUD has risen by 0.25% against the USD, with additional gains of 0.20% against major currencies like the EUR and GBP. The accompanying table offers a clear view of percentage changes among these currencies for easier comparison. Today, on December 5, 2025, China has announced its plans to boost consumer spending. So far, the market reaction has been calm, as the Australian dollar has not reacted strongly to the news. This indicates that traders are cautious and waiting for more specific details and signs of actual implementation. These announcements are not unexpected, considering that China’s economic growth in Q3 2025 came in at 4.9%, slightly below predictions, and October’s retail sales figures were weak. The government feels pressure to stimulate the economy from consumer spending, not just from industrial production. Therefore, we should take these announcements more seriously than in the past.

Opportunities for Traders

For traders in derivatives, this situation presents an opportunity with the Australian dollar, which serves as a key indicator of China’s economic health due to strong trade ties. The AUD is currently the strongest major currency today, although this may not be directly linked to the news from China. A good strategy for the upcoming weeks might be to consider buying AUD/USD call options expiring in late January or February 2026, especially if these stimulus measures take off. In the past, significant Chinese stimulus efforts, such as those after the 2008 financial crisis and during the post-COVID period in 2023, have led to notable increases in commodity prices and the AUD. Although this new plan focuses on consumption, expanding imports could still drive demand for raw materials. Historical trends suggest that if Beijing follows through, there could be a significant delayed impact on currency markets. Due to the uncertainty surrounding the timing and effectiveness of these policies, another strategy is to trade on the anticipated rise in volatility. Buying a straddle on AUD/USD—acquiring both a call and a put option at the same strike price—could be beneficial if the currency experiences a sharp movement in either direction. This strategy would be profitable whether the stimulus is highly successful or falls short of market expectations. Additionally, we should consider derivatives linked directly to industrial commodities. If China’s plans to encourage appliance purchases and expand services are successful, this will directly increase demand for base metals. We should keep an eye on futures and options for copper, as its price often reflects Chinese economic activity. Create your live VT Markets account and start trading now.

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