The Australian and New Zealand dollars hit multi-month highs on Wednesday, while the yuan reached its highest level in over a year, as China’s robust stimulus plan delivered the latest boost to risk appetite.
The US dollar, a traditional safe-haven currency, has come under pressure as China’s robust stimulus steps on Tuesday boosted risk appetite, with mounting predictions on another large US rate cut in November adding to headwinds for the greenback.
Meanwhile, sterling rose 0.1% to $1.3430, a level not reached since March 2022. It received extra assistance from the Bank of England’s less aggressive estimates for rate cuts this year, compared to the Federal Reserve.
Markets now expect a 59.5% chance of a 50-basis-point rate cut at the Fed’s next policy meeting, up from 37% a week ago, according to the CME FedWatch tool.
The Australian dollar reached at $0.6908 in the early Asian session, its highest since February 2023, while the kiwi rose to a nine-month high of $0.63555, as both currencies extended their gains from the previous day.
Global markets were enjoying in the aftermath of China’s newest wave of support measures unveiled on Tuesday, which ranged from massive rate cuts to stock market aid, in a move that cheered investors.
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