China, Australia ink direct currency exchange deal

China and Australia have reached a new agreement to allow the Chinese and Australian currencies to trade directly. Visiting Australian Prime Minister Julia Gillard made the announcement on Monday in Shanghai.

The agreement makes the Australian dollar the third major currency to directly trade in China's mainland foreign exchange market, after the US dollar and the Japanese yen. Gillard said the move reflects the rapid growth of bilateral trade and the value of two-way investment between China and Australia. According to Gillard, China has authorised ANZ Bank and the Westpac Banking Corporation to be the market makers for direct trading of China's Yuan and the Australian dollar. The direct exchange deal is set to be formally announced on Tuesday and will take effect on Wednesday.