The Australian dollar has backed away from a one month high, as traders take profits.
At 0700 AEST on Thursday, the local unit was trading at 93.79 US cents, down from 93.98 cents on Wednesday.
The currency peaked at 94.10 US cents on Wednesday, its highest level since May 14.
Westpac senior market strategist Imre Speizer said talk of an interest rate cut by the European Central Bank (ECB) is also pushing the Australian dollar a little lower.
“ECB member and Bundesbank head Jens Weidmann repeated he would support an easing package if necessary, although he cautioned it was not a done deal,” Speizer said.
“A Reuters story said measures being prepared for the June 5 meeting included a deposit rate cut.”
Speizer expects the Australian dollar to slowly gain ground in the coming months helped by a stable interest rate outlook from the Reserve Bank of Australia.
“The medium term looks constructive, with a retest of 94.50 US cents possible during the months ahead,” he said.
“The RBA’s neutral policy bias and some encouraging Australian economic data are supportive.”
AAP
