Dollar hits record high
THE Australian dollar was stronger in local trading as investors favoured domestic and overseas risk assets due to strong global growth on the horizon.
At 5pm yesterday, the Australian dollar was trading at 102.62 US cents, up from Friday’s local close of 102.22 US cents.
The local unit set a new post-float record high of 103.94 US cents in the early hours of Saturday morning on offshore markets, beating the previous high of 102.54 US cents on January 1. Nomura Aus t r a l i a c h i e f economist Stephen Roberts said the local unit had been ‘‘ pretty firm over the course o f t he s e s s i o n’ ’ . ‘ ‘ We’re around the upper end of the r a nge a nd i t ’ s g o ne up against just about everything, including the US dollar, Sterling and yen,’’ Mr Roberts said.
Despite the unrest in the Middle East and destruction and uncertainty in Japan, there was a view that global growth would pick up as economies r ecovered, he said. ‘‘ There’s more confidence in global growth, going forward,’’ he said.
Mr Roberts predicted the local unit would continue to firm ahead of the release of important US non-farm payrolls figures on Friday.
At 4pm yesterday, the Australian dollar was at 83.91 J a p a n e s e y e n , u p f r o m Friday’s close of 82.79 yen, and at 73.02 euro cents, up from 72.12 euro cents.
The euro finished at 1.4054 US dollars, down from 1.4174 US dollars, and at 114.93 yen, up from 114.79 yen. The US dollar was at 81.77 Japanese yen, up from 80.99 yen on Friday. Australian bonds closed weaker on Monday after failing to wind back earlier losses triggered by s of t er US Treasuries on Friday night. At 3.30pm yesterday on the ASX 24, the June 10-year bond futures contract price was at 94.490 ( implying a yield of 5.510 per cent), down from 94.545 ( 5.455 per cent) on Friday. The June three-year bond futures c o nt r a c t was t r a d i ng a t 94.910 ( 5.090 per cent), down from 94.980 ( 5.020 per cent).
US equities rallied further on Friday night on the back of upbeat earnings reports, and Australian bond yields rose in response. The local market could not stage a rally, with no local economic data to provide the spark. Although the board of the Reserve Bank of Australia has its monthly monetary policy meeting scheduled for Tuesday next week, the market was not preoccupied with the meeting’s outcome, according to Deutsche Bank.