Upward momentum for dollar

The Australian dollar is more than half a US cent higher following gains on the New York stock market.

At 0700 AEDT on Tuesday, the currency was trading at 102.70 US cents, up from 102.18 US cents on Monday afternoon.

BK Asset Management director Boris Schlossberg said the Australian dollar had taken its lead from Wall Street in a quiet trading session for currency markets.

“With no economic reports on the calendar the currency markets remained listless, taking whatever small directional cue they could from the equity market which continued to push higher,” he said.

“The Aussie responded best to the uptick in equities, rising through the 102.70 (US cent) level.”

New York stocks opened lower before moving into positive territory and posting modest gains.

While Tuesday’s local trading session is expected to be quiet, Schlossberg said the key local driver for the Australian dollar this week would be the release of domestic employment figures for February on Thursday.

He said markets were expecting the figures to show modest jobs growth.

Better than expected jobs growth would reduce expectations of further interest rate cuts and push the Australian dollar higher, while a weaker figure would weigh heavily on the currency.

The Reserve Bank of Australia kept the cash rate on hold at 3.0 per cent in February after cutting it 1.75 percentage points between November 2011 and December 2012.




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