On Wednesday, antipodean currencies hit multi-month highs, and the yuan reached a year-long peak, driven by China's aggressive stimulus.
The antipodean currencies scaled multi-month peaks on Wednesday while the yuan hit its strongest level in more than a year, as China's aggressive stimulus package boosted risk appetite.
The Australian dollar later pared some of its gains after data showed domestic consumer prices slowed to a three-year low in August, while core inflation hit its lowest since early 2022.
The PBOC announced plans to lower borrowing costs, inject more funds into the economy, and ease the mortgage repayment burden for households, marking its latest effort to combat deflation.
Iron ore rallied strongly for a second consecutive day, driven by speculation that China's massive stimulus could boost demand, raising the possibility that prices may regain momentum and push back into triple digits.
On Tuesday, the RBA mention that interest rate cuts are unlikely anytime soon and kept its policies unchanged. However, they softened their strict stance by mentioning that further rate hikes were not discussed.
Meanwhile, political pressure to lower rates is growing. The left-wing Greens are urging the government to lower interest rates in exchange for their support in passing long-delayed reforms to the RBA.
The Australian dollar is facing the major resistance at 0.6900. Another rejection the level could lead to a deep correction towards 0.6600 as seen in 2023.
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