The Australian dollar strengthened on Wednesday, supported by rising metals prices, which bolstered demand for the resource-linked currency. The uptick reflects optimism in global commodity markets, with iron ore and copper prices showing significant gains.
The People’s Bank of China (PBoC) also decided to keep its loan prime rates (LPRs) unchanged, signaling a steady monetary policy stance. This move reinforced confidence in China’s economic stability, benefiting the Australian dollar as China is Australia’s largest trading partner.
Traders noted that the Aussie’s gains were further supported by a softer US dollar, which remained under pressure amid mixed US economic data. The reduced greenback strength provided additional room for the Australian dollar to advance.
Analysts suggest the Australian dollar’s short-term trajectory will hinge on global risk sentiment and commodity price trends. While the currency shows resilience, any unexpected shifts in China’s policy or weakening demand for metals could limit further upside potential.
