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Dollar rallies on greenback weakness

 

peanuts, money, dollars, pay, salaryThe Australian dollar is stronger against the greenback and has reached a seven year high against the Japanese yen.

At 0700 AEDT on Monday, the local currency was trading at 87.66 US cents, up from 86.84 cents on Friday.

It was worth 102.16 Japanese yen, up from 100.97 yen and touching levels last reached in October 2007.

But Westpac senior market strategist, Imre Speizer, said an unexplained drop in the greenback had more to do with the Australian dollar’s strength than the local unit’s rise against the yen.

The US dollar fell against a range of currencies on Friday night despite official data showing a 0.3 per cent rise in American retail sales during October.

“It was an odd and largely unexplained move,” Speizer said from Auckland.

“The Aussie rose and the US dollar fell about five minutes after some fairly strong US economic data.”

Meanwhile, Japanese economic growth figures for the September quarter are due out on Monday.

The economy of Australia’s second biggest trading partner shrunk during the June quarter, following a tax increase in April which has threatened to plunge Japan back into recession.

But Speizer said the Australian dollar’s rise against the yen had more to do with the Bank of Japan signalling earlier in November it would engage in quantitative easing stimulus measures.

AAP

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