The Australian dollar jumped to a two-month high after data showed China’s economy expanded at a faster-than-expected pace in the fourth quarter of 2016.
China is Australia’s No.1 trading partner while the Aussie is often seen as a liquid proxy for the yuan.
The dollar is currently trading at US75.82¢, just below today’s peak of US75.89¢, a level not seen since November 11.
The Aussie is up about 1 per cent this week and is on track to clock its fourth straight weekly gain. It is up 5.3 per cent in January so far, making it one of the best performing major currencies in the world.
“I have been fielding more questions about the Aussie’s resilience over the past 24 hours than any other currency,” said Stephen Innes, senior currency trader at OANDA Australia and Asia Pacific.
“Australia (is) an oasis in this politically contentious global environment. In addition to the political stability, yields remain attractive.”
The Aussie extended its winning streak elsewhere. It touched a 1-1/2-year peak against the euro after the head of the European Central Bank pointed to subdued inflation and the need for further monetary policy stimulus. It also rose on the yen to be near a one-month high.
Investors are now awaiting the inauguration of Donald Trump later on Friday for further cues. Trump will be sworn in as the 45th president of the United States.
“Donald Trump will take centre stage as we begin a new chapter in American politics and global financial markets. Buckle up as we are likely in for a wild ride these next 100 days,” Innes said.