The Australian and New Zealand dollars climbed against their major counterparts in the European session on Tuesday amid risk appetite, as the State Council, China’s cabinet, said the country would adopt a more ‘vigorous’ fiscal policy to support the economy.
Proactive fiscal measures will cover deeper tax cuts, additional deductions to companies on research and development expenditure and issuing special bonds to local government to fund infrastructure projects.
The announcement came after the central bank injected a record CNY 502 billion into the banking system via medium-term lending facility on Monday.
In another development, Beijing said it has no intention to devalue the yuan to help exports.
The aussie advanced to 0.7407 against the greenback and 1.5803 against the euro, from its early 4-day lows of 0.7360 and 1.5870, respectively. If the aussie extends its rise, 0.75 and 1.57 are possibly seen as its next resistance levels against the greenback and the euro, respectively.
The aussie rose to 0.9741 against the loonie and 1.0889 against the kiwi, reversing from its early low of 0.9707 and a weekly low of 1.0862, respectively. The aussie is seen finding resistance around 0.99 against the loonie and 1.11 versus the kiwi.
The aussie bounced off to 82.29 against the yen, from near a 3-week low of 81.81 hit at 9:15 pm ET. The next possible resistance for the aussie is seen around the 84.00 level.
The kiwi recovered to 1.7195 against the euro and 75.62 against the yen, from its early low of 1.7250 and near a 3-week low of 75.27, respectively. On the upside, 1.70 and 77.00 are likely seen as the next resistance levels for the kiwi against the euro and the yen, respectively.
The kiwi climbed to 0.6804 against the greenback, from a 4-day low of 0.6769 seen at 2:45 am ET. Next key resistance for the kiwi is seen around the 0.69 mark.
Looking ahead, U.S. house price index for May and Markit’s U.S. manufacturing PMI for July are set for release in the New York session.