(Australian Associated Press)
The Australian dollar has surged nearly half a cent is back above 76 US cents after the US dollar, along with Wall Street equities, fell following disappointing US durable goods data and the Federal Reserve chief’s dovish commentary.
At 0637 AEDT on Thursday, the Australian dollar was worth 76.12 US cents, up from 75.65 US cents on Wednesday.
Westpac’s Imre Speizer says possible contributors to the declines were disappointing durable goods data and Fed chair Janet Yellen’s dovish commentary.
Also, market liquidity thinned on the eve of Thanksgiving Day, with the markets closed on Thursday (US time) and a trading short day on Friday.
“The US dollar index is down 0.5 per cent on the day, (the) EUR rose from 1.1740 to 1.1817, (and) USD/JPY extended yesterday’s decline from 112.20 to 111.30 – a two-month low,” Mr Speizer said in a morning note.
The Australian dollar had risen from a low of 75.55 US cents.
US durable goods orders fell 1.2 per cent in October, while the market had expected a 0.3 rise, (while) core capital goods orders underwhelmed, down 0.5 per cent, versus an estimated 0.5 per cent lift, even allowing for an upward revision to the prior month, Mr Speizer said.
The Federal Open Markets Committee minutes noted that an increase in rates is “likely warranted” if the economy remains on track.
“Interestingly, ‘a couple’ of officials discussed changing the inflation target to a price level target, a potentially dovish development.”
No local major event risk is on the horizon for Thursday.
Mr Speizer said he thought the local currency could lift to 0.7625 “if risk sentiment remains elevated or the US dollar slips further”.
The Aussie dollar is down against the yen and unchanged against the euro.
CURRENCY SNAPSHOT AT 0637 AEDT ON THURSDAY
One Australian dollar buys:
* 76.12 US cents, from 75.65 on Wednesday
* 84.65 Japanese yen, from 84.86 yen
* 64.41 euro cents, unchanged
(*Currency closes taken at 1700 AEDT previous local session)