Aussie dollar hits 2014 high
Australia's dollar has hit a 2014 high, continuing its stubborn streak.
The Aussie is fetching US91.31c - its highest since December 2, 2013 - following hopes that weak Chinese economic data released on Monday will prompt some stimulus from Beijing.
HSBC's China flash Purchasing Managers Index sagged to an eight-month low of 48.1 in March, compared with 48.5 in February. Economists had expected a reading of 48.7.
FxPro head of research Simon Smith said the weaker number initially ''knocked some wind out of the Aussie''. But traders were then buoyed by the possibility that Beijing would launch a series of policies to stabilise growth.
The Aussie breached US91c and continued to rise in overnight trade. But while traders are betting on some kind of stimulus from Chinese authorities, Credit Suisse economist Dong Tao expected any package to be measured and selective.
He said in a note to investors on Monday that Beijing was cautious about local government debt and expected the central bank to ease back on its monetary stance.
The Aussie has been trading at an average US89.47c this year. After hitting a low of US86.68¢ on January 24, it has been fetching between US89-90c.
Although Australian Reserve Bank governor Glenn Stevens has stated that he'd rather an eight than a nine in front of the Aussie, he indicated earlier this month he was comfortable with its current levels.
Stevens told a Senate economics committee that while there was scope to lower interest rates, "I don't think we do need to at this point in time".
"We have signalled the likelihood, if the economy evolves more or less as expected, of a period of stability in the cash rate," he said.
Sydney Morning Herald