Investing.com – The Australian dollar gained on Wednesday in Asia after China, its biggest trading partner, reported strong GDP data.
The pair gained 0.2% to 0.7190 by 12:18 AM ET (04:18 GMT).
China’s economy at an annualized rate of 6.4% in the first quarter of 2019, beating the expected growth rate of 6.3%. and were also stronger than expected.
Yesterday, data showed housing prices in China rose at the fastest pace since 2017 in March.
The Aussie took a brief hit overnight after the Reserve Bank of Australia said it believes a cut in interest rates would be “appropriate” should inflation stay low and unemployment trend higher.
Meanwhile, the pair lost 0.5% as the country’s annual inflation slowed in the first quarter, raising the chances of an interest rate cut in the coming months.
The that tracks the greenback against a basket of other currencies traded near flat at 96.60.
Charles Evans, president of the Chicago Fed, told CNBC earlier this week that he would be “comfortable” with interest rates staying put until the autumn of 2020 to help ensure inflation returns to the Fed’s target rate of 2%.
“I can see the funds rate being flat or unchanged into the fall of 2020. For me that’s to help support the inflation outlook and make sure that its sustainable at 2% or a little above,” Evans said.
The pair edged up 0.1% to 1.3059 after Labour leader Jeremy Corbyn denied a report that Brexit talks with Prime Minister Theresa May’s government had stalled.
The pair was largely unchanged at 111.95. Bank of Japan’s deputy governor Masayoshi Amamiya said on Wednesday that the central bank is ready to deploy monetary policy tools in event of financial crisis.
“One of the factors that led to Japan’s asset-inflated bubble (in the late 1980s) was the fact we kept monetary policy easy even as the economy continued to expand,” Amamiya said in parliament.
“The BOJ must be mindful of the potential risks to the economy and prices, including financial imbalances,” he said, adding that “in terms of monetary policy, we’re ready to respond if financial problems have a big impact on the economy.”
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