Dollar regains strength

 

US dollarThe Australian dollar is firmer as profit takers sell the greenback.

At 0700 AEDT on Wednesday, the local currency was trading at 83.04 US cents, up from 82.39 cents on Tuesday.

The unit has risen even though global equity markets and commodity prices have fallen, which would normally weigh on the Australian dollar.

Westpac senior market strategist Imre Speizer said the local currency was firmer because traders had sold the US dollar to make a profit.

“The US dollar’s had a very strong run over the last few months and that was looking quite stretched,” he said from Auckland.

“There appears to be some fairly decent profit taking going on last night.

“That caused the US dollar to pull back – that’s why the Aussie’s higher.”

During Monday night’s session the US Dollar Index, which measures the greenback’s strength against a basket of currencies including the Japanese yen, euro and British pound sterling, had touched the highest level since March 2009.

The euro had also fallen to the lowest point against the greenback since August 2012.

But Spezier said the US dollar was likely to continuing rising, which would cause the Australian dollar to fall again.

The Australian dollar fell to 82.24 US cents on Tuesday afternoon, its lowest level since June 2010, after National Australia Bank joined Westpac in forecasting interest rate cuts next year.

During offshore trade, crude oil prices hit the lowest levels since 2009.

AAP

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