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Dollar higher off greenback

Coin, graph, dollarThe Australian dollar is slightly higher after the US central bank failed to give a clear indication on when it will raise its interest rate.

At 0700 AEST on Thursday, the local unit was trading at 76.81 US cents, up from 76.77 cents on Wednesday.

The minutes of the US Federal Reserve’s March policy meeting showed that its first rate rise since the global financial crisis could be in June, late 2015 or sometime in 2016.

National Australia Bank senior economist, David de Garis, said that while the central bank’s Federal Open Market Committee (FOMC) members agree that they should be looking to raise the Federal Funds Rate some weak economic data had made some of them cautious.

“In short, there’s a wide divergence of views within the Fed, no consensus on lift off timing,” he said.

“The final arbiter will be the data: recent data argued for delayed rate lift off.

“A June 18 rate lift off is now being priced as quite a slim chance.”

De Garis said the Australian dollar was also getting continued support from the Reserve Bank’s decision on Tuesday to keep the cash rate unchanged at 2.25 per cent, at least for another month.

AAP

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