Aussie dollar rallies
At 0700 AEST on Tuesday, the local unit was trading at 94.32 US cents, up from 94.19 cents on Monday.
Since 1700 AEST on Monday, the Australian dollar has traded between 93.67 and 94.60 US cents.
On Monday, the HSBC Purchasing Managers’ Index (PMI) indicated that China’s manufacturing activity expanded in September to a six-month high.
OM Financial senior client adviser Stuart Ive said that was good news for the Australian economy and the Australian dollar.
“The Chinese PMI yesterday did give the Aussie dollar a lift,” he said from Wellington.
“That strength continued throughout the night.”
Ive said the Australian dollar lost a little ground after New York Federal Reserve chairman William Dudley gave a speech defending the US Federal Reserve’s decision to stick with its economic stimulus program, but he also said a tapering timetable was in place.
“Dudley said the economy isn’t quite at the right place to initialise the tapering just yet,” Mr Ive said.
“That took a little bit of the steam out of the Australian dollar.”
Ive said further hints about the US Federal Reserve’s tapering plans will be a big market mover this week, as will negotiations to raise the US government’s debt ceiling.
He expects the Australian dollar to trade in a range between 94.00 and 94.60 US cents on Tuesday.
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