Dollar bounces back

 

dollar,coin,moneyThe Australian dollar has bounced back from four year lows overnight as commodity prices stage a recovery.

At 0700 AEDT on Tuesday, the local currency was trading at 85.09 US cents, up from 84.38 cents on Monday.

The Australian dollar dropped as low as 84.17 US cents on Monday, its lowest level since July 2010, as crude oil prices reached five year lows.

Gold prices also sank, after a referendum to compel the Swiss National Bank to hold at least 20 per cent of its assets in gold failed.

But both oil and gold prices have since rebounded, lending support to the Australian dollar.

“The rise in gold prices and general recovery in commodity prices is helping the Australian dollar quite a bit,” BK Asset Management MD, Kathy Lien, said.

Lien said there was some risk heading into the Reserve Bank’s final board meeting of the year on Tuesday, amid some expectations of a more downbeat statement from the central bank, which is widely expected to keep the cash rate at a record low 2.5 per cent.

There’s also a batch of data being released by the Australian Bureau of Statistics on Tuesday, including building approvals and balance of payments figures.

AAP

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