The Australian dollar got back on its feet on Thursday as investors took to heart that US interest rates will stay very low for a long time and resumed selling the US currency. The Aussie resumed its recent climb to reach $0.8738, from an intra-day low of $0.8645, within sight of a 13-month high of $0.8790 hit Wednesday. It was down on a firmer yen, however, at 79.11 yen, from Wednesday's 79.49.
"The bigger backdrop of the US dollar weakening still stands," said Alex Sinton, a dealer at ANZ. "We have seen more carry-trade flow based on US dollar weakness in recent months." The Federal Reserve vowed at its policy meeting on Wednesday to keep US rates between 0-0.25 percent for an "extended" period of time. It also outlined how it would end some of its extraordinary asset buying programmes. Many analysts think that is bad news for the US currency as it encourages investors to sell the low-yielding dollar in favour of higher-yielding ones such as the Aussie.
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