The Australian dollar struck fresh 14-month highs on Tuesday as investors piled on to high-yielding currencies on hopes that robust US company earnings would boost hopes of a sustained global economic rebound. The Aussie was also gained momentum from better-than-expected retail sales data from New Zealand.
By evening, the Aussie was at $0.9072, having touched a high of $0.9096, compared with $0.9065 late in New York on Monday, when it had gained 0.3 percent. Resistance is seen around $0.9130 while support is strong at $0.8875. "Expectations are that positive US earnings numbers will benefit the Australian dollar," said Sara Hoenig, economist at Commonwealth Bank. "Rising hopes of a global recovery and expectations that the central bank will keep raising rates will see the Aussie climb further." The Australian dollar has a strong correlation with stock markets and both tend to move in tandem.
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