August 25, 2022 12:38 AM ET
The AUD/USD pair rose half a percent and came close to the intraday high of 0.6955 during Thursday's Asian session. The latest gains in the Aussie pair could be attributed to China's efforts to keep the world's second-largest economy from slipping into recession, as well as expectations that central bankers will be less aggressive at the Jackson Hole symposium.
According to Bloomberg, China's Cabinet and State Council presented a 19-point package of measures while announcing CNY1 trillion ($146 billion) worth of economic stimulus measures to boost growth affected by COVID blockades and the property market crisis.
In addition, Li Zhong, vice minister of the Ministry of Human Resources and Social Security, said Thursday that China will focus on employment development and promote fiscal, monetary, and industrial policies to support the stabilization of the labor market.
However, it should be noted that global rating giant Fitch mentioned that China's land market has yet to recover in a sustainable manner. In a similar vein, one could cite comments from Sara Johnson, executive director of economic research at S&P Global Market Intelligence, who said Wednesday that global growth is expected to remain weak in late 2022 and 2023, while inflation is expected to moderate over the next two years.
Positive news from Beijing is assisting AUD/USD buyers.
Given the mixed U.S. data and fears of an impending economic slowdown, markets are hoping that Fed Chairman Jerome Powell may refrain from taking a hawkish stance during his speech on Friday. Despite this, traders in fed funds futures expect the Fed to raise rates by 75 basis points at its September meeting, with a 50 basis point increase expected at 39 percent, according to Reuters.