The Australian dollar, often viewed by traders as a proxy for the Chinese economy, gained 0.3 per cent against its US counterpart.
China's currency, the yuan (CNY), only partially reflects what goes on in China's economy. It doesn't trade freely; the Chinese government sets an official rate for it every day and only allows it to fluctuate 1 percent around that level every day. In fact, it doesn't even vary that much; the average difference between the high and the low price last year was a mere 0.15 percent. However, there is a version of the yuan (CNH) that trades freely overseas. The government doesn't fix a value for that, but as its value never strays that far from the value of the yuan, it too is relatively stable. The result is that the currency, whether traded on the mainland or overseas, only reacts modestly to Chinese economic indicators and other news that would be market-moving in other, freely traded currencies.
That's why the market has turned to the Australian dollar as a proxy for China. The Australian economy is almost tied to the hip to China – about one-third of its exports go to Greater China and, perhaps more importantly, two-thirds of its exports are products where China sets the price: coal, iron ore, wool, metals, etc. The mining and mining-related sector alone accounts for 19 percent of gross domestic product, while most of the growth of the country comes from the mining and agricultural sectors, which are now aimed squarely at the China market. With the fate of the Australian economy tied so closely to China, it should be no surprise that people who trade the Aussie dollar do so with one eye on China.
I couldn't read the FT article... but...
According to this article here, China imports a lot of raw material from Australia. This means that if Chinese economy is doing well, they import a lot of stuff from Australia... hence AUD will appreciate.
This news piece, for example, says that as China is hit with new tariffs, AUD falls. This is because the Chinese won't be able to export as much, which means they won't demand as much raw material from Australia anymore.
Or this more recent article says that Chinese CPI comes out higher than expected. This means that it's more likely that the PBOC (China's central bank) will need to do something to reign in inflation, slowing down the Chinese economy and Australian exports. This depreciates AUD.