The yuan was supported by fresh stimulus measures announced by the People’s Bank of China, which include cutting banks’ reserve requirements by about 50 basis points, signaling possible further cuts in lending rates, and measures to support the property market.
Although the yuan initially fell in offshore trade after the measures were announced, it later rose 0.38 percent to 7.0310 against the dollar as focus shifted to the prospects for stronger growth.
Australian Dollar
On the other hand, it rose Australian Dollar Today to its highest level this year amid the central bank’s insistence on curbing inflation.
The Reserve Bank of Australia held interest rates steady as widely expected, but traders hoping for any hints on when rates might be cut were disappointed as the central bank stressed it “remains committed to returning inflation to target” and indicated that raising rates remained an option.
“The RBA’s decision today amounts to a hawkish stance, which is consistent with our view that it is still too early to shift to easing,” IG analyst Tony Sycamore told Reuters.
“However, the shift could happen very quickly… We believe that the possibility of a rate cut in December is currently out of the question,” he added.
The Australian dollar, which is sensitive to expectations about the Chinese economy, also received some additional support from stimulus measures announced by the People’s Bank of China.
The Australian pound rose 0.46 percent to $0.68695, its highest since Dec. 28, before paring gains to $0.68435 by 0540 GMT after Reserve Bank of Australia Governor Michelle Bullock said raising interest rates was not explicitly discussed at the meeting.
On the other hand, the yen fell 0.36 percent to 144.12 against the dollar after Bank of Japan Governor Kazuo Ueda confirmed in a speech on Tuesday that the bank “can spend time” monitoring developments in external markets and economies before tightening monetary policy further.
The euro was little changed at $1.1117.
Sterling hit a two-and-a-half-year high as the Bank of England last week took a less dovish stance than the Federal Reserve or the European Central Bank. It rose 0.09 percent to $1.3360. It earlier hit $1.3366 for the first time since March 2022.
