Dollar builds momentum

spending, dollar, money, graphThe Australian dollar has again broken past US80 cents, buoyed by weak US economic data and a Federal Reserve meeting that contained no major surprises.

At 0700 AEST on Thursday, the local currency was trading at 80.08 US cents, up from 79.99 cents on Wednesday.

Bank of New Zealand currency strategist, Raiko Shareef, said the overnight session had been one of two halves for the Australian dollar.

“A lot of the spurt above 80 cents was driven by generalised US dollar weakness after the pretty weak US GDP (gross domestic product) report,” Shareef said.

“After that, we had the FOMC (Federal Open Market Committee) which wasn’t really a change from the March statement.”

He said the US Federal Reserve’s April statement led to “a bit of a pullback on all the majors against the US dollar”.

Data out overnight showed that the US economy slowed to just a 0.2 per cent annual growth pace in the first quarter, while the Federal Reserve indicated it still expects to begin a slow series of rate rises, though perhaps not in June as many analysts had been expecting.

Shareef tipped a relatively quiet session for the local currency on Thursday.

He said there was no economic data due out that was likely to cause major market moves.

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