The Australian dollar gained for a ninth straight session on Friday to near a 10-week peak on Friday as the Federal Reserves radical policies undermined confidence in the worlds reserve currency. The Aussie held ground at $0.6875, off a peak of $0.6943 struck in New York but above $0.6752 seen here late Thursday. For the week, it was up 4.6 percent on the US dollar.
Dealers said they were still coming to grips with how the Feds plan to buy $300 billion of longer-term government debt will cheapen the US dollar, and some were betting the Aussie would push toward 70 cents in the next few days. "There is further weakness for the US dollar, so the Aussie can move a little higher," said John Horner, a strategist at Deutsche Bank. Some traders they were encouraged to see the Aussie holding steady above its previous resistance level of $0.6850.
A big retracement level at $0.6890 is also seen as technically bullish for a push above 70 US cents. The Aussie has recovered over 10 percent from the years low of $0.6245 struck on February 2, but is still down 2.8 percent for this year. "Its resilience makes us think the worst of the Aussie selling appears to be behind us," Morgan Stanley said in a note to clients, although it said it remained cautious.