Australian & New Zealand Currencies Fall on China's Rate Decrease

23 Jul 2024 , 10:18 AM

The Australian and New Zealand dollars fell to multi-week lows on Tuesday following China’s decision to slash several major interest rates, but the dollar remained relatively unchanged as it anticipated additional stimulus.

China stunned markets on Monday by lowering major short- and long-term interest rates for the first time since August, suggesting an intention to promote growth in the world’s second-largest economy.

The two Antipodean currencies, which are frequently viewed as liquid proxies for the Chinese yuan, remained steady after falling in the previous session in response to the news. The Australian dollar traded at $0.6643 early Tuesday, while the New Zealand dollar fell 0.01% to $0.5979.

The offshore yuan last traded at 7.2973 per dollar.

In the broader market, currency movements were muted as traders anticipated central bank meetings in the United States and Japan next week.

The euro dipped 0.02% to $1.0889, while sterling dropped 0.02% to $1.2928.

Against the yen, the dollar fell 0.14% to 156.79. The dollar index remained unchanged at 104.29.

The market’s reaction to US President Joe Biden’s decision to withdraw from the election campaign over the weekend was modest, though there was some unwinding of the so-called Trump trade, which saw the dollar and US Treasury yields dip somewhat, while bitcoin’s advance came to a halt.

In cryptocurrency, bitcoin slid 0.7% to $67,665, retreating from a more than one-month high reached the previous session.

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