Weak US data boosts dollar
At 0700 AEST on Wednesday, the local currency was trading at 93.94 US cents, virtually unchanged from 93.93 cents on Tuesday.
The Australian dollar reached 94.24 US cents overnight after figures from the US Labour Department showed that although higher petrol prices pushed US consumer prices up in June, the pace of inflation slowed from May.
The department’s consumer price index rose 0.3 per cent last month, easing from a hefty 0.4 per cent rise in May – the largest increase since February 2013.
The US dollar temporarily lost some ground after the figures were released, giving the Australian dollar a boost, National Australia Bank senior economist David de Garis said.
“But the US dollar recovered ground as stocks held onto their gains, with the Australian dollar easing back to around 93.90 to 94 US cents,” de Garis said.
Easing tensions over Malaysia Airlines flight MH17 crash in Ukraine also boosted risk appetite, he said.
“It’s been a risk on mood in global markets overnight, aided somewhat by the recovery of bodies from the MH17 crash site which has done something to ease Russian tensions, for now anyway,” he said.
All eyes on Wednesday will be on inflation figures out from the Australian Bureau of Statistics at 1130 AEST.
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