After making exporters anxious for the past week or more the Australian dollar has gone higher, finally braking through the US80 cent ceiling, and even reaching beyond US81c at one point today.
The dollar’s climb to its highest point 2015, has been driven by a collapse in the US currency after a “dovish” statement from the US Federal Reserve Bank doused the hope of recovery in the greenback in the near term.
The US central bank opted to hold US interest rates unchanged at between one per cent and 1.25pc during its monthly board meeting on Thursday.
It noted US inflation was below the Fed's annual target of two per cent.
Although Australia’s Reserve Bank (RBA) governor, Philip Lowe, has also been relatively subdued about the local economy and denying any near-term plans for interest rate rises, our dollar was unable to resist pressure caused by the devaluing US currency.
The local currency is also higher against the yen and the euro.
A week ago the Australian dollar touched the 80 cent barrier several times, then briefly slipped back to US78c after dampening comments from the RBA about interest rates.
The RBA insists the dollar is too high and likely to undermine export prospects, and the economy, if it keeps rising.
Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
