Assurance from China’s Central Bank Helps the Australian and NZ Dollar to Edge Up
Yesterday, as China allowed the yuan to drop at the fixing the Australian and New Zealand dollars also faced the jitters.
But with some assurance from the central Bank of China that will not allow the yuan to drop to shore up the economy, both the currencies bounced back a little on Thursday.
The Australian dollar slowly moved up to $0.7384 which marks the recovery of almost one percent overnight. It slid for some time by half a cent as China allowed its yuan to drop but swiftly recovered as the Chinese currency stabilized.
Elias Haddad, Commonwealth Bank of Australia 's senior currency strategist said, "The Aussie is higher because the Chinese central bank is trying to slow down the depreciation of its currency by selling U.S. dollars"
On Wednesday the Australian dollar had dropped $0.7217 which is its lowest level since 2009. The drop was initiated by concerns over the weak health of Chinese economy.
The Chinese market frequently uses the Australian dollar as a liquid proxy to shield against the weakness of the Chinese currency.
The New Zealand dollar also touched its six year low on Wednesday at $0.6468. On Thursday it climbed up to $0.6632.
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