The Australian dollar extended its early rally against its major counterparts in European deals on Friday, after the People Bank of China unexpectedly lowered interest rates and reserve ratio, which was the sixth reduction since November last year as economic growth slows.
The People’s Bank of China cut the one-year lending rate and deposit rate by a quarter-point to 4.35 percent and 1.5 percent, respectively. The new rates will take effect on Saturday.
Previously, the bank lowered the interest rates by 25 basis points in August.
The aussie firmed to a 3-day high of 0.7296 against the greenback, 10-day highs of 0.9536 versus the loonie and 88.10 against the yen, from Thursday’s closing values of 0.7205, 0.9432 and 86.97,respectively.
The aussie strengthened to 1.5190 against the euro, its strongest since August 20.
Bouncing off from its prior 5-1/2-month low of 1.0572 against the NZ dollar, the aussie edged up to 1.0715.
If the aussie extends rise, it is likely to find resistance around 0.75 against the greenback, 0.975 against the loonie, 92.00 against the yen and 1.50 against the euro.
The NZ dollar extended its gains against the U.S. dollar alone following the news, touching a weekly high of 0.6865. The next possible resistance for the kiwi-greenback pair is seen around the 0.70 region.
The material has been provided by InstaForex Company – www.instaforex.com