Australian dollar firms on US central banker rate call

THE Australian dollar is one US cent firmer after a voting member of the US Federal Reserve argued that American interest rates should stay near zero.

Australian currency.

THE Australian dollar is one US cent firmer after a voting member of the US Federal Reserve argued that American interest rates should stay near zero for quite a bit longer.

At 0700 AEDT on Monday, the Australian dollar was worth 77.82 US cents, up from 76.85 US cents, on Friday.

The greenback lost momentum during offshore trade after Federal Reserve Bank of Chicago president Charles Evans released a research paper arguing that interest rates should remain near zero for longer amid “substantial uncertainty” about inflation and employment.

This, in turn, boosted the Australian dollar, Bank of New Zealand strategist Kymberly Martin said.

“That commentary certainly played a part,” she said from Wellington.

“The Aussie dollar was one of the beneficiaries of that as opposed to anything specifically related to the Australian economy.” Dr Evans, a voting member of the US Federal Reserve’s Federal Open Market Committee in 2015, is considered a dived on interest rates.

“The biggest risk we face today is prematurely engineering restrictive monetary policy conditions,” he wrote in the paper co-written with three researchers.

CURRENCY SNAPSHOT AT 0700 AEDT ON MONDAY

One Australian dollar buys:

* 77.82 US cents, from 76.85 cents on Friday

* 93.29 Japanese yen, from 92.75 yen

* 71.78 euro cents, from 71.19 euro cents

* 102.85 New Zealand cents, from 103.20 NZ cents

* 51.99 British pence, from 52.07 pence

(*Closes taken at 1700 AEDT previous local session) Source: IRESS

Originally published as Australian dollar firms on US central banker rate call