Dollar hits one month high

coins, dollar, moneyThe Australian dollar has pushed above 79 US cents for the first time in a month on the back of some strong Chinese data and easing rate hike expectations in the US.

At 0700 AEDT on Thursday, the local unit was trading at 78.92 US cents, up from 78.88 cents on Wednesday.

Early on Thursday morning, it peaked at 79.03 US cents, the currency’s highest level since January 29.

The HSBC Purchasing Managers’ Index (PMI) on Wednesday showed that Chinese factory activity expanded in February, ending two months of contraction, a bright spot for the world’s second-largest economy.

BK Asset Management, managing director, Boris Schlossberg, said the Australian dollar benefited from the data and kept rising when European markets opened. “The Aussie ran all the way to 79 US cents on the back of better HSBC flash PMI readings out of China,” he said.

“The Aussie was the biggest beneficiary of the news as a pickup in Chinese manufacturing indicates that demand for Australia’s raw materials may remain steady.”

The Australian dollar is also getting support from continued US dollar weakness after the second day of Congressional testimony by US Federal Reserve chair Janet Yellen.

Yellen reiterated her stance that the Fed will be patient when it comes to raising its interest rate, indicating a hike won’t come before June.

Key economic figures out on Thursday will be the official capital expenditure report that is expected to show a further slowdown in business investment, especially in the mining sector.

AAP

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