The resource-rich Australian dollar hovered near an 11-month high on Friday, buoyed by rising gold and industrial metals prices and awaiting the next move in the US dollar to see whether 78 US cents could be breached.
Gold, highly correlated to the Aussie dollar, suffered some profit-taking after hitting a 26-year high, ebbing under $720 an ounce from its offshore peak at $726 an ounce.
Renewed negative US dollar sentiment also kept the Aussie dollar bid, as investors bet on a pause in the US tightening campaign now that the Federal Reserve has lifted its key rate to 5 percent.
"Unless there is a major correction in base metals, the Aussie dollar should remain reasonably well supported - even at these elevated levels," said Richard Grace, senior currency strategist at Commonwealth Bank.
One Aussie bought $0.7768/72, posting a gain of 0.6 percent on the week. It traded a $0.7753-$0.7782 range on Friday, dipping slightly after striking an 11-month high at $0.7794 offshore.
"The debate should now be how long will it take to test the 80-cent mark? Now only two cents away," said Peter Pontikis, analyst at Suncorp.
The US dollar fell as soft retail sales data fuelled expectations that the Fed may soon pause. The Fed lifted rates on Wednesday and left the door open for a further tightening.
Comments
Comments are closed.