Global Currencies Surge Amid China's Stimulus

Australian and New Zealand dollars hit multi-month peaks while sterling surged to a two-year high against a weakened U.S. dollar. This rise was fueled by China's aggressive stimulus measures, lifting global risk sentiment. Investors anticipated further U.S. rate cuts, diminishing the dollar's appeal.

The Australian and New Zealand dollars reached multi-month highs on Wednesday, with sterling hitting its most elevated point in over two years against a weaker U.S. dollar. This rise came following China's recent aggressive stimulus package, which invigorated risk appetite across global markets.

The Australian dollar peaked at $0.6907 during the early Asian session, marking its highest level since February 2023. Simultaneously, the New Zealand dollar climbed to a nine-month high of $0.6353. These gains were bolstered by China's comprehensive support measures announced on Tuesday, including substantial rate cuts and support for the stock market.

Sterling also saw a boost, advancing 0.1% to $1.3429, a level not seen since March 2022. This optimism stemmed from expectations of fewer rate cuts from the Bank of England compared to the Federal Reserve. "Judging by the financial market reaction, these announcements exceeded market expectations," said Carol Kong, currency strategist at Commonwealth Bank of Australia.

(With inputs from agencies.)