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Dollar higher as global stocks rally

 

dollar,coin,moneyThe Australian dollar has drifted higher following a rally on global share markets and expectations that the greenback will trade within a narrow range.

At 0700 AEST on Wednesday, the local currency was trading at 92.68 US cents, up from 92.39 cents on Tuesday.

European and US stocks rallied overnight, giving the Australian dollar a boost.

The local currency is also being boosted by expectations that US economic data and the US Federal Reserve monetary policy decision this week will be in line with market expectations, BK Asset Management MD Kathy Lien said.

“The reason why the Australian dollar has started the Asian session well is because we had a nice little recovery in US stocks,” Lien said.

“If the Federal Reserve and gross domestic product reports are boring and don’t have any surprises, that will leave the narrow trading range in the US dollar in tact.

“The US dollar is not expected to see a significant widening of its trading range, and as a result, we’re seeing the Aussie dollar supported because some people are unwinding their US dollar trades.”

The Fed will make its monetary policy announcement on Thursday morning, Australian time, following the release of US first-quarter GDP figures.

AAP

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