Australian dollar strengthens

dollar51The Australian dollar is back above 78 US cents as the US dollar’s rise falters and it slips amid an equity rebound.

At 0635 AEDT on Tuesday, the Australian dollar was worth 78.44 US cents, up from 78.35 US cents on Monday.

Appetite for risk-taking crept back into currency markets to the detriment of the US currency and helped higher-yielding emerging market currencies as well as commodity-linked currencies like the Australian and Canadian dollars, Reuters reported.

“The index that tracks the US dollar against a basket of currencies was down 0.2 per cent at 90.291, erasing some of the gains last week,” the agency said.

Westpac’s Imre Speizer later said the US dollar had slipped a little further.

“The USD index is 0.3 per cent lower on the day … (while the) AUD rose from 0.7810 to 0.7847,” he said in a morning note.

The main event risk for the local currency on Tuesday would be Reserve Bank of Australia assistant governor (Economics) Luci Eillis’s speech at the ABE forecasting conference in Sydney around 0850 AEDT.

Also, the National Australia Bank’s business survey for January, which was steady in 2017, may have an impact, he said.

He thinks the Australian dollar could even extend its latest gains and reach above 79 US cents.

“(There’s) potential for this rebound to extend to 0.7900 if the USD remains stalled and/or equities recover further.”

The Aussie dollar is also higher against the yen and the euro.


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