Australian Dollar Holds Advance Before Chinese Economic Reportsby and
Aussie keeps gains versus major peers after Jan. 15 slump
Canadian dollar stays above 13-year low, stems three-week drop
Australia’s dollar held gains and the yen remained weaker after China’s central bank helped calm investors’ nerves Monday by strengthening the yuan fixing by the most in almost a month.
The Australian dollar outperformed all of its 16 major peers Tuesday after slumping last week to the lowest level in almost seven years. China, which is due to publish a slew of economic data this week, will report on Tuesday that fourth-quarter gross domestic product grew at an annual rate of 6.9 percent, according to economist estimates. The country is a major export destination for Australia and Canada. The Canadian dollar remained above a 13-year low.
“We are seeing stability in sentiment which has been the primary driver of the foreign-exchange market,” said Peter Rosenstreich, head of market strategy at Swissquote Bank SA in Gland, Switzerland. “That has given well-oversold commodity currencies room to recover. However, we don’t expect this bullish momentum to be extensive.”
The Aussie dollar rose 0.2 percent to 68.76 U.S. cents as of 8:03 a.m. Tokyo from Monday. It tumbled to 68.64 U.S. cents on Jan. 15, the weakest closing level since March 2009.
The greenback was at $1.0890 per eurofrom $1.0892. The yen, seen by some investors as a haven, was little changed at 117.40 against the dollar after dropping 0.3 percent Monday. Financial markets in the U.S. are closed Monday for a public holiday.
The People’s Bank of China raised its daily reference rate for the yuan by 0.07 percent on Monday, the most since Dec. 21, after weaker-than-expected fixings earlier this month rattled financial markets worldwide.
The central bank said it will impose reserve-requirement ratios on yuan deposited onshore by overseas financial institutions from Jan. 25, without saying what level would be used. While a slowdown in China continues to hurt exporters, signs that the world’s second-biggest economy is stabilizing and increased clarity on the timing for U.S. rate increases are bolstering speculation that commodities will rebound from their worst year since 2008.
The Canadian dollarwas little changed at C$1.4558 versus the U.S. currency. It touched an almost 13-year low Monday.