Global Currencies Surge Amid China's Stimulus Drive

The Australian and New Zealand dollars reached multi-month peaks following China's aggressive stimulus measures. The yuan hit a 16-month high. The Aussie and kiwi dollars benefited from strong links to the Chinese economy. Meanwhile, the dollar index faced pressure, hitting near its lowest point in over a year.

In a significant market movement, both the Australian and New Zealand dollars hit multi-month highs on Wednesday, largely influenced by China's robust stimulus package. This financial boost also led to the yuan reaching its strongest level in over a year, reflecting a growing risk appetite among investors.

The Australian dollar peaked at $0.6907 during the early Asian session but later receded slightly to $0.6888 following local data revealing a three-year low in domestic consumer prices. Similarly, the kiwi advanced to a nine-month high of $0.6353. Other global markets also gained, buoyed by China's extensive support measures, including substantial rate cuts to bolster its stock market.

The People's Bank of China's reduction in medium-term loan costs to 2.00% from 2.30% further boosted market sentiment. This move particularly supported currencies closely tied to the Chinese economy, with the yuan's onshore unit rising to 7.0012 per dollar. Elsewhere, sterling climbed to $1.3430, while the dollar index struggled, hovering near a one-year low. Overall, the global currency market is seeing significant shifts amid ongoing economic measures.

(With inputs from agencies.)