The Australian dollar has firmed following a rebound in commodity prices overnight.

At 0700 AEDT on Tuesday, the currency was trading at 72.43 US cents, up from 72 cents on Monday.

Kim Martin, senior market strategist, Bank of New Zealand, said both the Aussie and the Kiwi traded higher overnight, which was unusual given the risk aversion in global markets.

“This morning, we had a rebound in commodity prices, particularity the oil price. That helped support commodity-linked currencies,” she said.

The price of Brent crude was up one per cent after dipping to a fresh seven-year low.

“The moves are somewhat counter-intuitive as there’s still quite a bit of concern about global credit markets,” Martin said.

“It could just be some positioning up ahead of the end of the year.”

AAP

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