On Tuesday, the AUD/USD traded upward after the news about the latest interventions by the NBK.
The Australian dollar is feeling good on Tuesday. The AUD/USD pair is now trading around the level of 0.6982, and the daily growth is estimated at half a percent.
Today Australia did not publish any of their own statistics, but investors are watching the Chinese news with great interest. The People's Bank of China today has poured $ 67.1 billion (440 billion yuan) into the financial system of the country, using the mechanism of purchase of securities, allowing the re-sale at a fixed price. Each subsequent time the Central Bank of China increased the volume of interventions. The official reason for the cash injections into the economy in such a significant scale is the approaching Chinese New Year (February 8). Traditionally the people give money as a gift, and the Central Bank saturates the system with money, not to have a liquidity vacuum later on.
This is probably only one of the reasons for the intervention - the injection is not the first and, I think, not the last. The Bank of China continues to soften monetary conditions within the system, in order to best withstand the external negativity.
From this perspective, the policy interventions are quite justified to Chinese realities. Last published Chinese statistics were very far from positive, and the country very much so needed good news.
RoboForex Analytical Department
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