Australian dollar tests higher

07 Oct, 2004

The Australian dollar tested the 72.50 US cents area again on Thursday, firming on a rise in commodity prices and as a private survey showed retail spending jumped in September.
However, the Aussie failed to take the move much further as caution set in ahead of Thursday's labour force data and on the risk the market will get jittery if opinion polls continue to show a tight finish for Saturday's national election.
The Reserve Bank of Australia's decision to leave the cash rate unchanged at 5.25 percent was widely expected, keeping it at 350 basis points above the US fed funds rate.
The AUD was $0.7239/44, compared with $0.7210/14 on Tuesday and having survived severe tests around the 72-cent mark in the past couple of days, keeping a rising trend since early September intact.
"Clearly any further weakness in employment data ... would add to the concern that RBA rate hikes will only occur, if at all, towards the middle of next year, and weigh on the AUD," said ANZ Investment Bank currency strategist Craig Ferguson.

Read Comments