TOKYO (BLOOMBERG) - Australia's dollar advanced to an eight-month high versus the US dollar as a rally in global equities emboldened investment in higher-yielding assets.

The Aussie rebounded after earlier declining on new signs of a slowdown in China, the South Pacific nation's largest export market. Hedge funds and other large speculators have turned increasingly bullish on Australia's currency for seven straight weeks - matching the longest run since 1994 - as traders pared bets that the Reserve Bank of Australia will cut interest rates.

"Risk appetite has improved," supporting the Australian dollar, said Janu Chan, a senior economist in Sydney at St George Bank Ltd, a division of Westpac Banking Corp. "There is more resilience in the Australian economy than most give it credit for, and I suppose that's what's helping to keep the Aussie high now."

Options markets indicate traders have pared bets on an RBA rate cut by its August meeting to 46 per cent, from 73 per cent at the start of this month. St George Bank forecasts the central bank will refrain from lowering its benchmark throughout 2016.

Australia's dollar rose 0.4 per cent to 75.92 US cents as of 1.44 pm in Tokyo, the highest since July 3. It has rallied 6.3 per cent so far this month, the best performance among Group of 10 peers.

The MSCI Asia Pacific Index of shares climbed 1.1 per cent - following a 1.6 per cent jump in the Standard & Poor's 500 Index on Friday - even after data released over the weekend showed China's industrial output and retail sales slowed from a year earlier and trailed analysts' estimates.

Speculators raised bullish Aussie bets to a net 29,195 contracts in the week to March 8, the highest level since the period ended Sept 9, 2014, according to the latest data available from the Commodity Futures Trading Commission.