Australian Dollar Higher as China Trade Pact Signed

        By James Glynn
        SYDNEY--The Australian dollar was higher Monday riding weakness in the greenback and helped by the signing of a free-trade pact with China, which is expected to lift economic growth over time.
        At 0630 GMT, the Australian dollar changed hands at US$0.8784, compared with US$0.8710 late Friday.
        The trade deal, which has taken the better part of a decade to complete, includes tariff arrangements that would benefit, among others, Australian farmers, winemakers and several services companies. Meanwhile, China will face less scrutiny on investments in companies in Australia, while its workers will have better access to employment opportunities here.
        The deal was signed in Canberra following a meeting of G-20 leaders in Brisbane over the weekend, and coincides with a state visit to Australia by China's President Xi Jinping.
        Earlier, Japan's economy shrank for a second quarter in row, heightening Prime Minister Shinzo Abe's struggle to salvage a pro-growth platform that has drawn world-wide notice. Japan's real gross domestic product fell 1.6% on an annualized basis in the July-September period, following a 7.3% contraction in the previous quarter.
        None of the 18 economists surveyed by The Wall Street Journal had forecast a contraction; the median forecast was for a 2.25% expansion.
        Richard Grace, the global head of currency strategy at Commonwealth Bank, said Australia won't be overly affected by the weakness in Japan's economy.
        "Australia has been able to grow for a long time with Japan experiencing four recessions over the last decade or so," he said.
        -Write to James Glynn at james.glynn@wsj.com
        (END) Dow Jones Newswires

        November 17, 2014 01:51 ET (06:51 GMT)