Above: Li Qiang, Premier of the People's Republic of China at the Annual Meeting of the New Champions 2023 in Tianjin, People's Republic of China, 27 June 2023. Tianjin Meijiang Convention Center. Copyright: World Economic Forum/Benedikt von Loebell.

The Australian Dollar rebounded against the Pound, Euro, Dollar and other major currencies after China confirmed further measures were in the pipeline to boost economic growth in a move that helped spur an improvement in broader investor sentiment.

Chinese Premier Li Qiang told a conference his government would roll out more effective measures to boost demand and that the economy was on track to reach the 4.5% growth target for the year.

He did not introduce any new substantial economic policies but promised that "more pragmatic and effective" plans would be put in place.

Qiang made the commitment when addressing the World Economic Forum's 14th Annual Meeting of the New Champions, often called the Summer Davos, in the northern Chinese city of Tianjin.

The Australian Dollar remains highly sensitive to expectations for Chinese growth and the comments underscored a rise in the currency which has been losing value of late.

But analysts say another driver of Australian Dollar outperformance was a rise in the value of the Chinese Yuan, to which the Aussie is closely correlated.

"AUD leads gains for most G10 currencies... after PBoC fixed USD/CNY below the consensus expectation for the second day running," says Adam Cole, Chief Currency Strategist at RBC Capital Markets.

The People's Bank of China (PBoC) fixed the exchange rate at 7.2098 against an estimate of 7.2209.

"The PBoC’s USD-CNY fixing this morning at 7.2098 vs. the spot exchange trading 111 pips higher suggests that Chinese monetary authorities do not like recent excessive, one-side movements of the exchange rate," says Roberto Mialich, FX Strategist at UniCredit Bank in Milan.

The developments out of China have helped contribute to a broadly positive setup for investors on Tuesday, creating the supportive sentiment typically associated with Aussie Dollar upside.

The Pound to Australian Dollar exchange rate has retreated from Monday's high at 1.91 to quote at 1.8975. The Australian to U.S. Dollar exchange rate has rallied 0.60% on the day to quote at 0.6715.

China has already introduced numerous measures to boost the economy's performance in 2023 as growth has disappointed against the lofty expectations that were in place at the start of the year when a post-Covid rebound was expected.

However, measures have thus far been highly targeted and have not driven the broad-based economic boost that would typically be expected to propel the Aussie Dollar higher.

This is because Australia is a major exporter of industrial commodities, the kind that are in demand when China is building.

China's property sector has come under particular pressure over recent months as the government tries to deflate what was a development bubble, without triggering a crash. It is a sector that has therefore largely been excluded from major stimulus measures.

Therefore, it remains to be seen just how supportive future Chinese stimulus can be of Australia and its dollar.