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$A extends rally above 91 US cents

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Published on: Thursday, September 05, 2013

A variety of factors are helping the Australian dollar extend its four-day rally, which has seen it go close to 92 US cents.

At 1200 AEST on Thursday, the local unit was trading at 91.80 US cents, up from 91.29 cents on Wednesday.

In overnight trade, it peaked at 91.89 US cents, the currency's highest level since August 19.

Forex.com research analyst Chris Tedder said continuing positive international market sentiment was helping to support the Australian dollar.

"The sentiment stems from the fact that there is less of a concern about military intervention in Syria," he said.

"There's also the more neutral stance from the RBA and the better than expected GDP number."

The currency rose on Tuesday when the Reserve Bank of Australia kept the cash rate at 2.5 per cent and gave no guidance on future rate movements.

Then solid economic growth figures released on Wednesday continued to Australian dollar's rise.

Investors are now awaiting the the release on Friday of US employment figures for August.

It will be the last piece of data released before the US Federal Reserve's policy meeting on September 17-18, when it is expected to make a decision on the tapering of its massive economic stimulus program.

Strong American employment growth will increase the likelihood of tapering and put downward pressure on the Australian dollar.

"That'll be the big one, it'll be make or break for the Fed," Mr Tedder said.

He expects the Australian dollar to stay between 91 US cents and 92 cents on Thursday afternoon.

Meanwhile, Australian bond futures prices were lower at noon.

The September 10-year bond futures contract was trading at 95.940 (implying a yield of 4.060 per cent), down from 95.980 (4.020 per cent) on Wednesday.

The September three-year bond futures contract was at 97.030 (2.970 per cent), down from 97.060 (2.940 per cent).


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