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Despite the rate cuts, China is anticipated to take further actions to boost economic performance and instill confidence, which has been decreasing since the weekend.
At the beginning of the year, there was a widespread belief that the global demand would undergo a significant resurgence following China's decision to abandon its zero-Covid strategy towards the end of last year. However, only six months have passed, and various things seem to be going wrong in multiple ways.
Up until now today, the decrease in interest rates is not giving support to investments with higher risk and might even be having the opposite effect as indicated by the Chinese yuan and the antipodean currencies. The AUD/USD has decreased by 0.7% to 0.6800 as the upward trend starts to slow down, having previously almost hit 0.6900 at the conclusion of last week.
In the area of stock investments, S&P 500 futures have declined by 0.2% today. However, even when observing stocks in different regions of Asia, there is not much to be optimistic about. The Hang Seng stocks have decreased by 1.5%, while stocks in mainland China have remained relatively stable.
The market is possibly indicating that the rate cuts are not a solution to China's recent economic struggles, but rather an indication of further problems.
