MW: Aussie reclaims parity against U.S. dollar briefly
By Sue Chang
SAN FRANCISCO (MarketWatch) -- A surprise Chinese interest rate cut helped the Australian dollar temporarily reclaim parity against the U.S. currency on Thursday. After hitting an intraday high of $1.0002 earlier, the Aussie-U.S. dollar pair AUDUSD +0.0488% was trading at 99.37 U.S. cents in recent activity. The People's Bank of China said it will lower benchmark lending and deposit rates by 0.25 percentage point starting Friday in response to a worsening debt crisis in the euro zone. "The outstanding question is whether the impact of the surprise cut on the Aussie will survive the week/weekend if Chairman Bernanke disappoints later this morning and Chinese data disappoints this weekend?," said currency strategists at CitiFx in a report. Federal Reserve Chairman Ben Bernanke is testifying at a Joint Economic Committee of Congress. The financial markets have recently been watching for signs from the Fed of further accomodative steps to bolster the U.S. economy.
