Dollar bounces back

 

online dollarThe Australian dollar has bounced back above 88 US cents following the release of disappointing economic data in the US.

At 0700 AEDT on Thursday, the local currency was trading at 88.12 US cents, up from 87.31 cents on Wednesday.

Figures from the US overnight showed that retail sales retreated in September while producer prices also fell.

Meanwhile, the US Federal Reserve’s Beige Book report said the US economy was growing at about the same modest pace it had maintained in recent months.

Westpac senior market strategist in Wellington, Imre Speizer, said risk aversion accelerated overnight.

The US dollar dropped while bond prices surged.

He said the disappointing US data, along with additional reports on the spread of the Ebola virus, had driven the moves, but the Australian dollar had fared well.

“(The Australian dollar was) weighed by global risk aversion but supported by US dollar weakness,” Speizer said.

“We favour a rise towards 88.50 US cents.”

AAP

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