Aussie Gets Boost from People’s Bank of China

Australian dollar got a boost in earlier trading as the governor of the People’s Bank of China reassured Europe — and the world — that China is still committed to investing in the euro as an asset. The news provided a little bit of risk appetite in the midst of uncertainty. Aussie is also receiving help from the Reserve Bank of Australia, which continues to show caution about cutting interest rates.

Worries about the eurozone are cropping up again as a Greek debt deal is delayed again. However, PBOC Governor Zhou Xiaochuan expressed his confidence that the eurozone would be able to navigate the trouble, and he reiterated China’s support for the euro. This show of faith helped give the Aussie a bit of a boost — even if it failed to help the euro much against the US dollar.
Another focus has been on the RBA. RBA officials have been reluctant to cut interest rates, and that has proved a positive for the Aussie. That Australia doesn’t feel the need to ease monetary policy is encouraging to many who hope that the economy Down Under will remain somewhat strong. Higher gold prices are also providing a certain amount of support for the Australian dollar.
At 15:37 GMT AUD/USD is up to 1.0726 from the open at 1.0682. EUR/AUD is down to 1.2190 from the open at 1.2281. AUD/JPY is higher at 84.04, up from the open at 83.84.

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