Dollar recovers some losses

 

dollar,coin,moneyThe Australian dollar is trading in a narrow range, having recovered some of its losses from earlier in the week.

At 0700 AEST on Thursday, the local currency was trading at 88.87 US cents, up from 88.81 cents on Wednesday.

National Australia Bank global co-head of FX strategy, Ray Attrill, said markets were showing almost the complete opposite of moves witnessed on Tuesday, when the Australian dollar fell to a near eight month low.

“Thus US equities have bounced back, US bond yields are higher and commodity currencies (such as the Australian dollar) sit at the top rather than the bottom of the FX leader board,” Attrill said.

“The moves are aided by stronger metals prices and no further fall in iron ore.”

All eyes on Thursday would be on Reserve Bank governor, Glenn Stevens’s participation in a panel discussion in Melbourne, Attrill said.

Investors will be keen to hear what the governor has to say about the recent fall of the Australian dollar as well as the potential for the central bank to intervene to cool the overheating property market, he said.

“If anyone is expecting a detailed expose of what the RBA has in mind here (and bearing in mind it is APRA who has the responsibility for implementing macro-prudential policy) they are prone to disappointment,” Attrill said.

“Any comments on the fall in the currency this month (that now runs to six per cent against the US dollar) will also be of keen interest.

“If Stevens does choose to say anything about current levels, it is most likely to be to the effect that the Australian dollar is still seen as somewhat overvalued.”

AAP

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