AUD/USD keeps gains after China stimulus talk and PBOC rate cut

• China finance ministry is out on the wires stating that it would boost fiscal expenditure in 2019.
• The PBOC cut the reserve requirement ratio as announced on Jan. 4.
• AUD/USD has barely moved in response to China stimulus talk, but continues to report gains amid risk-on action in the equities.

The Aussie dollar has barely moved in response to China stimulus talk.

The nation’s finance ministry said a few minutes ago that it is planning to boost fiscal expenditure in 2019 to counter the rising risk of a deeper economic slowdown.

Further, the People’s Bank of China (PBOC) slashed rates by 0.5 percentage points as announced on Jan. 4. Moreover, the rates are set to drop by another 0.5 percentage points on Jan. 25.

The Aussie dollar (a proxy for China), however, is struggling to extend gains seen in early Asai, which indicates that the rate cut was already priced-in.

That said, the path of least resistance is to the higher side, as the equity markets are trading in green. As of writing, names like Nikkei, Kospi, and Hang Seng are up 0.8 percent to 1.4 percent. Meanwhile, the AUD/USD is trading above 0.7212, having picked up a bid at 0.7191 in early Asia.

AUD/USD Technical Levels