The AUD/USD pair is growing for the second day in a row, and the news out of China supported the Australian currency.
The Australian dollar was supported by much of today's news from China. On Tuesday it became known that the Central Bank of China has poured at least 30 billion Yuan into the financial system of the country. That's about $ 4.7 billion. Today's intervention is the second in a row. Last week, the central bank liquidity has fuelled the Chinese economy. Then, at least 10 billion Yuan was poured in.
The scheme is always identical: the Bank of China conducts short-term auctions for yields no higher than 2.25%. The essence of the matter remains the same: the Chinese economy really needs this support in order to enhance the growth of GDP.
Yesterday Chinese authorities conducted a meeting, which spoke of the likely expansion of incentive programs. This usually happens: the market receives a signal in advance of the action of the local CB. This is a reasonable approach. In 2015 the Chinese regulator worked closely with the financial market – it reduced the cost of lending, conducted interventions, devalued the yuan, reduced the level of requirements for banking regulations. It is a downright ideal monetary policy for the current time: it must necessarily give a good effect. Another thing is whether these measures contribute to a new momentum in the growing Chinese GDP.
The Australian dollar as a standard responds well to any news related to the positive outlook on China.
RoboForex Analytical Department
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