Dollar hits four week high
At 0700 AEST on Wednesday, the local unit was trading at 93.74 US cents, up from 93.65 cents on Tuesday.
Early on Wednesday morning, the currency peaked at 93.85 US cents, its highest level since May 15.
The National Australia Bank business survey, released on Tuesday, showed business confidence levels remained steady in May, in contrast to a fall in consumer confidence on the back of the federal budget.
OM Financial senior client adviser Stuart Ive said a run of positive economic data in recent days has been encouraging investors to grab higher yielding but riskier assets.
“The real underlying theme with the Aussie dollar is this global surge for yields, we’ve seen the US data improve and we’ve had better data from China,” he said.
“Most commodity currencies have edged higher, we’ve also seen the iron ore price recover a fraction.”
The Australian dollar also hit a six month high of 69.25 euro cents on Wednesday morning, as the euro falls against most major currencies after the European Central Bank (ECB) recently announced a raft of policies to stimulate the region’s economy.
“We’re seeing the euro come under pressure as more policy makers stress that the ECB they could do more if required in term of adding stimulus to their economy,” Ive said.
“The comments by ECB policy maker are having an effect and is sending the Euro lower.”
Local economic data out on Wednesday includes the Westpac/Melbourne Institute Survey of Consumer Sentiment.
Investors will be looking for signs that consumer sentiment has recovered after suffering a big setback in May after the release of the tough Federal Budget.
Ive expects the Australian dollar to trade in a range between 93.50 US cents and 94.00 cent on Wednesday.