SYDNEY: The Australian dollar has rallied to a one-month high after China’s central bank announced measures to stimulate lending.
At 7am (AEST), the local currency was trading at US78.28c, up from US77.89c on Friday.
China’s central bank says it will cut the level of funds that commercial banks must hold in reserve by one percentage point, the second such move this year to boost lending.
The Australian dollar rallied on the announcement, reaching US78.42c, its highest level since March 26.
The news boosted the local and New Zealand currencies after Friday’s slump, when weak US economic data and concerns over Greece’s debt problems weighed on risk appetite and sent equity markets lower, National Australia Bank global co-head of FX strategy Ray Attrill said.
In a statement on its website, the People’s Bank of China said the cut would “further enhance the ability of financial institutions to support restructuring”.
