Supported by Upbeat Data and Signs of Stronger China’s Economy, Aussie Snaps Three-day Slide
Oct, 10th 07:07
The Australian dollar strengthened versus its American counterpart on Tuesday, snapping a three-day streak of losses. The Aussie gained ground in the wake of upbeat economic data and signs of stronger economic growth in China.
The pair AUDUSD added more than 0.5 percent to trade at $0.7796 in Asian trading session on Tuesday. The National Australia Bank reported that the nation’s business conditions remained strong in September. Indeed, NAB’s Business Confidence index jumped to a net balance of +7 last month, up from +5 in August and above analysts’ expectations calling for a rise to +6.
NAB’s Chief Economist, Alan Oster, claimed that “Business conditions at these levels tell us that the business sector in Australia is doing very well.”
Meanwhile, head of the National Bureau of Statistics of China, Ning Jizhe reportedly said that China would have no problem meeting its economic growth target of around 6.5 percent this year, and may even surpass this target. Jizhe also added that measures taken by the government to cool the overheated property market have been effective and will remain in place.
Also supported by a weak dollar, the Chinese yuan rose on Tuesday as China’s central bank guided the currency’s midpoint higher. The People’s Bank of China (PBOC) fixed the official midpoint at 6.6273 per dollar, firmer than Monday’s fixing of 6.6493 per dollar, marking the first time it has raised that guidance in two weeks.
As China has become the biggest trading partner of Australia, especially Australian iron ore and coal, while Australian economy depends heavily on the foreign investment and commodity exports, investor sentiment towards the Aussie tends to partly be dictated by Chinese economic prospects.
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