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Australian dollar rises

dollar1The Australian dollar has crept higher against its US counterpart, which has consolidated its gains made earlier in the London-New York session.

At 0635 AEDT on Tuesday, the Australian dollar was worth 78.31 US cents, up from 78.20 US cents on Monday.

Westpac’s Imre Speizer says the US dollar had preserved its previous gains, while US equities made fresh record highs, and the local currency had rebounded from a six-week low.

“The US dollar index is up 0.5 per cent on the day, but most of those gains came before the London/New York session where it consolidated,” he said in a morning note.

“(The) AUD rebounded from 0.7796 (a six-week low) to 0.7840.”

The main local event risk on Tuesday would be the Reserve Bank of Australia’s policy decision and interest rate announcement.

“(The interest rate) is widely expected to be on hold.

“Markets are pricing in the likelihood of hikes in 2018 but Westpac remains of the view that rates are on hold.”

August’s dwelling approvals would also be of interest to investors.

Speizer said he expected the local currency would hold above 78 US cents “for now”, adding that the “RBA is the key risk event today”.

The Aussie dollar is also higher against the euro and steady against the yen.

AAP

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