By TraderVox.com
Tradervox.com (Dublin) – The Australian dollar advanced against most of its major counterparts as speculation of additional stimulus from Chinese government rose. The Aussie appreciated as China’s export prospects rose. The New Zealand dollar increased against the US dollar after the central bank in China injected $58 billion in the economy pushing the Kiwi to its fourth weekly gain. China, which is Australia’s biggest trade partner and New Zealand’s second largest trade partner, has pledged to increase stimulus to support growth in the country. The demand for south pacific currencies also rose after Spain announced its fifth austerity package hence reducing concerns that it may fail to meet austerity requirements.
The People’s Republic of China has experienced deteriorating economic growth in the recent times forcing Fitch Rating company to lower their forecast for the country. Fitch has indicated that the Chinese economy will grow by 7.8 percent lower than the 8 percent it had indicated earlier. Investors are now looking at the manufacturing and purchasing managers Index to be released on October 1 in China to see if there are any signs of renewed growth. The data is expected to increase pressure on Chinese Premier Wen Jiabao to boost growth in the country ahead of power transfer which will be done this year.
According to Matthew Stanley, the Head of Asia Pacific Sales in Sydney at Velocity Trade Ltd, the figures from China signal to the need for the government to make additional stimulus to spur growth. He added that the news from Spain will support the south pacific dollars during the next trading session. The Australian dollar has increased by 0.2 percent against the dollar to trade at $1.0458 at the close of trading in Sydney after it climbed by 0.7 percent yesterday when it traded at $1.0442. The Aussie is set to increase by 1.3 percent since August and a 2.2 percent for the third quarter. The New Zealand currency increased by 0.3 percent against the dollar to exchange at 83.41 US cents from yesterday. The currency is projected to increase by 3.8 percent this month and 4.1 percent increase in the third quarter.
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