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Dollar higher on Chinese rate cut

money, coins, dollarThe dollar is higher after the People’s Bank of China delivered a rate cut.

At 0700 AEDT on Monday, the local currency was trading at 78.21 US cents, up from 78.03 cents on Friday.

China’s central bank has said it will cut the benchmark deposit and loan interest rates by 25 basis points in a bid to stimulate waning growth in the world’s second largest economy.

Bank of New Zealand, strategist, Kymberly Martin, said the michael kors bags uk Australian dollar lifted on the announcement though it had started to rewind some of those gains on Monday morning.

“Clearly, the Australian economy is quite closely linked to China so the initial knee jerk reaction is that if the Chinese economy is doing better, that will be supportive for Aussie exports,” Martin said.

“But if you look a bit more deeply, the cut leads to a weaker yuan or signals further cuts, so the longer term prospects are actually not supportive for the Aussie dollar.”

Coming up on Monday, the latest CoreLogic RP Data house price figures are set to be released, along with inflation and manufacturing figures.

AAP

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