Dollar remains firm
The Australian dollar has opened firmer, with gains on US and European stock market helping lift the currency near 105 US cents.
At 0700 AEDT on Wednesday, the Australian dollar was at 104.86 US cents, up from Tuesday’s local close of 104.65 US cents.
The local unit reached a high of 104.97 US cents during the overnight offshore session, moving in line with gains on European and US stock markets.
Westpac senior currency strategist Richard Franulovich said the Australian dollar, and its New Zealand counterpart, posted gains in line with the rally on Wall Street.
“A day removed now from the drama of Cyprus and US stocks have climbed back to their highs of late last week and the Aussie and kiwi have ridden on the coat-tails of stocks,” Franulovich said.
The Dow was up about 0.8 per cent late in the New York session, while London’s FTSE 100 closed 0.3 per cent firmer.
The Australian dollar has risen about 2.7 per cent since reaching a low of near 102 US cents in early March.
Franulovich said while Europe had suffered in response to the banking crisis in Cyprus, non-European markets such as the Australian dollar and US stocks and bonds “had taken it in their stride”.
“It has been a major talking point for everyone in all markets but outside of any markets directly linked to Europe you would struggle to see any impact,” Franulovich said.
In economics news on Wednesday, the Reserve Bank of Australia is due to publish its latest financial stability review, which looks at the current condition of the financial system. Separately, RBA board member Jillian Broadbent is speaking at a business lunch in Sydney.
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