Dollar above parity on US speculation
THE Australian dollar has moved above parity on speculation the US central bank could inject a stimulus in the country’s economy to boost growth.
At 7am AEST today, the local unit was trading at 100.26 US cents, up from 99.48 cents yesterday.
HiFX senior trader Stuart Ive said the Australian dollar had been pushed up by moves in the US following the release of weak data.
“We’re a lot higher,” he said.
“The reason for that is that we saw the Dow Jones strengthen overnight, mainly led by weaker US data, especially employment numbers.
“This has led to heightened expectations that the Fed (Federal Reserve Committee) will go down the road of QE3 (quantitative easing) next week.”
US initial jobless claims rose last week, while inflation declined in May, according to the data.
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Global markets had also been shaped by commentary around the Greek election on Sunday, Mr Ive said.
“The Greek stock market rallied last night due to a rumour that one of the pro-European parties is in the lead, according to a poll,” he said.
“There have also been comments from G20 overnight saying that banks around the globe are ready to pump liquidity into the markets if it all goes wrong after the election.”
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