The Australian dollar and New Zealand dollar each gained more than 0.5 percent in the Asian session.

The Australian dollar strengthened in Asian session trading on Tuesday (23/January), with AUD/USD around 0.6600. Two positive news boosted the Aussie, namely the discourse of launching new stimulus in China and improving business sentiment data in Australia.

audusd

Bloomberg news agency reported that the Chinese government is considering a new stimulus package worth 2 trillion yuan to stabilize its stock market. China's stock market climbed immediately after the news broke, although it later slid back because there was no further confirmation from local officials. 

The Australian dollar and New Zealand dollar rates also climbed. At the time of writing, AUD/USD and NZD/USD had advanced more than 0.5% to 0.6609 and 0.6110 respectively.

"The news has triggered risk proxies, including the Australian dollar, New Zealand dollar ... higher," said Christopher Wong, currency strategist at OCBC. "It remains to be seen if this is just talk but if it does materialise sooner than later, then risk proxies can trade higher."

Meanwhile, NAB reported that the Australian Business Confidence Index improved slightly from -8 to -1 in the December 2023 period. The improvement was mainly due to the buoyancy of the retail sector ahead of Christmas.

NAB Chief Economist Alan Oster revealed that the situation is still very weak in the manufacturing, retail and wholesale sectors. He emphasized the need for caution in responding to this data release stating, "it remains to be seen whether this (improvement) will be sustained".

There are no other important data releases scheduled from the Antipodean region for the rest of the week. Both AUD/USD and NZD/USD are likely to be more influenced by news from the United States and China, especially regarding China's stimulus discourse and the Fed's interest rates.