The Australian dollar continues to be buoyed by greenback weakness amid easing tensions in Syria and a hawkish candidate’s withdrawal from the race to become the US central bank chairman.

At 0700 AEST on Tuesday, the local unit was trading at 93.18 US cents, down from 93.35 cents on Monday.

BK Asset Management MD, Kathy Lien, said the US dollar was trading lower against all major currencies, including the Aussie, amid speculation about the next US Federal Reserve chairman and easing concerns about a possible US-led strike on Syria.

The US dollar weakened after former US Treasury secretary Larry Summers withdrew his candidacy to succeed Ben Bernanke as Fed chairman.

Lien said Summers was seen as having a more positive effect on the greenback than the now-leading candidate Janet Yellen.

“Compared to Janet Yellen, he was largely viewed as the bigger friend to the dollar,” Lien said.

“While he was President Barack Obama’s preferred candidate, his decision was motivated by his concern that Obama would not be able to rally the Senate behind his nomination.

“Yellen was the more dollar-negative candidate and now that she has become the clear front runner, the currency has traded lower across the board.”

Lien said the greenback also lost its safe haven bid after the US and Russia reached a deal on Syria, ruling out an imminent military strike.

She said the Australian dollar could reach 94 US cents if the minutes of the Reserve Bank of Australia’s September meeting, being released on Tuesday, conveyed optimism.

AAP