The currencies of China’s trading partners such as the Australian and New Zealand dollars advanced on Monday after new announcements from Beijing on the revival of the Chinese economy.
Around 7:15 p.m. GMT, the Australian dollar advanced 0.89% against the greenback, to 1.5508 “Aussie” dollars for a “buck”, one of the nicknames of the United States currency.
The New Zealand currency increased by 0.68%, to 1.7033 “kiwi” dollars, one of its nicknames, for one American dollar.
At the same time, the yuan – whose price is controlled by the Chinese state – increased by 0.15%, to 7.2586 yuan per US dollar.
This upward movement in currencies is due to the announcement on Monday by members of the Political Bureau of the Central Committee of the Chinese Communist Party, a key decision-making body, of their wish to continue the country’s recovery and to adopt “a slightly relaxed monetary policy”. .
“We need to vigorously stimulate consumption, improve investment efficiency and comprehensively expand domestic demand,” officials were quoted as saying by state news agency Xinhua.
“This is a significant change in China’s intentions to resuscitate its economy,” Christopher Vecchio of Tastylive commented to AFP.
“Over the past fourteen years, the Central Bank of China (PBoC) has itself described the orientation of its monetary policy as being prudent, it is now moving towards a policy (…) moderately accommodating,” added the ‘analyst.
Dependent on the good economic health of China, the two countries’ largest trading partner, the Australian and New Zealand dollars have gained ground as a result.
“China is Australia’s largest trading partner, so greater economic activity in China ‘is good’ for Australia,” Mr Vecchio summarized.
“Australia is a major exporter of materials to China, and the situations (of the two countries) are closely linked,” observed Adam Button of Forex.com.
