Australian Dollar Spikes Up As China Slashes Interest Rate

Australian Dollar Spikes Up As China Slashes Interest Rate


The Australian dollar edged higher against its major rivals on Thursday after China cut its interest rates in an unexpected move amid increasing signs of a slowdown in the economy. Australia is a major exporter of mining goods and raw materials to China.
The People's Bank of China said in a statement that it was lowering the one-year deposit rate by 25 basis points. The one-year lending rate was reduced by 31 basis points. The new rates will come into effect on July 6. The reserve requirement ratio was reportedly left unchanged.
The Australian dollar jumped to 1.0325 against the US dollar around 7:00 am ET, its highest since May 3. Against the euro, the aussie advanced to 1.2137, its strongest level in 5-months.
The Australian currency also climbed to a 3-day high of 1.2812 against the NZ dollar and a session's high of 82.22 against the yen following the China rate cut.

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