Chinese data boosts dollar

 

Money, dollar, notes,pay, wagesThe Australian dollar is higher, helped by encouraging signs for the Chinese economy.

At 0700 AEST on Tuesday, the local unit was trading at 93.55 US cents, up from 93.37 cents on Friday, before the Queen’s Birthday public holiday.

Over the weekend, official figures showed that China’s trade surplus in May was larger than expected, a sign that its economy might not be as weak as recent data had suggested.

The People’s Bank of China reduced the reserve requirement ratio (RRR), the amount of cash that commercial banks must hold in reserve, in an effort to encourage banks to lend more.

National Australia Bank senior economist David de Garis said the move by the Chinese central bank boosted optimism about the Chinese economy, which also helps the Australian economy.

“It’s designed to provide reasonable and appropriate growth of money, credit and aggregate financing to promote stable economic operations,” he said.

“Analysts seem divided over whether such support will be sufficient for the economy, but the growth supportive policy intention of the authorities looks clear.”

In Australia on Tuesday, the ANZ will release its job ads data for May and NAB will release its business confidence survey, also for May.

AAP

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