Dollar climbs

money, dollar, coin, noteMore hints from the US central bank of a late interest rate hike have weighed on the US dollar and given the Australian currency a boost.

At 0700 AEDT on Tuesday, the Australian dollar was worth 78.92 US cents, up from 78.10 US cents, on Monday.

The US dollar weakened overnight for two reasons, one being more indications from the US Federal Reserve that it won’t lift rates until later in 2015, OMF’s senior foreign exchange client adviser, Stuart Ive, said.

He said the second reason was an upbeat European monetary policy testimony from European Central Bank, president, Mario Draghi to a European parliamentary committee overnight.

“The ECB president gave a more upbeat rundown of the European union,” Ive said. “There was also a trio of Fed speakers overnight who really didn’t add anything new but again pointed towards a September rate rise.

“This has led to a general US dollar weakness. Commodities have rallied on the back of that as well as the Australian dollar.”

Key data expected to impact on the local unit’s value is HSBC’s Chinese flash manufacturing purchasing managers index out later on Tuesday.

AAP

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