Dollar opens higher


graph,arrow,increase,rise,highThe Australian dollar is starting the week higher ahead of the Reserve Bank of Australia’s (RBA) last interest rate meeting for 2013.

At 0700 AEDT on Monday, the local unit was buying 91.33 US cents, up from 91.02 cents on Friday.

Financial markets are widely expecting the RBA to leave rates on hold when it meets on Tuesday for its last monthly board meeting for the year.

Westpac New Zealand senior market strategist Imre Speizer says traders are now regarding the local currency as over sold.

“(The) Aussie’s fallen and a weaker Aussie puts less pressure on the Reserve Bank to cut rates again and that in turns helps the Aussie rebound – it’s a circular argument,” he said.

“The Aussie dollar’s been sold off quite aggressively over the last few weeks and what we’re seeing now is a corrected rebound from that and it should head somewhere towards 92 (US) cents over the next day or two.”

The Australian dollar made gains during offshore trade as the shortened US Thanksgiving holiday session, on Friday, weakened the greenback, helping the Aussie.

The lack of news meant traders continued to expected the US Federal Reserve to begin tapering its stimulus measures sooner rather than later, Mr Speizer said.

“That’s why the US dollar took a breather and pulled back.”


You have 7 articles remaining. Unlock 15 free articles a month, it’s free.