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Dollar follows NZ dollar higher

 

dollar man, coinsThe Australian dollar is higher, supported by a weaker yen and a surging New Zealand dollar.

At 0700 AEDT on Thursday, the local unit was trading at 87.15 US cents, up from 86.85 cents on Wednesday.

The Aussie dollar has been steadily climbing against the yen since the Bank of Japan’s surprise announcement in October that it was increasing its already large bond buying program in a bid to revive its struggling economy.

On Wednesday it broke 100 yen for the first time since May last year, and is now trading at 100.69 yen.

Bank of NZ strategist, Kymberly Martin, said the NZ dollar was one of the strongest performers overnight.

“The Australian dollar has climbed along with the NZ dollar overnight,” she said.

Martin said the trans-Tasman currencies were boosted by a Reserve Bank of NZ financial stability report.

“It was a bit of an anti-climax, as no changes to loan to valuation ratio (LVR) restrictions were discussed, throwing cold water on recent speculation,” she said.

The report also reminded the market that the central bank is still in an interest rate hiking cycle .

On Thursday, markets will be focused on a speech by Reserve Bank assistant governor for economics in Sydney.

Chinese industrial production figures will also be released.

AAP

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