Australian dollar rebounds against stronger greenback

THE Australian dollar has rebounded against a rallying US dollar, supported by strong iron ore prices.

THE Australian dollar has rebounded against a rallying US dollar, supported by strong iron ore prices. At 0635 AEDT on Thursday, the Australian dollar was worth 78.32 US cents, up from 78.22 US cents on Wednesday.

The US dollar’s gains accelerated after data showed US construction spending rose 0.8 per cent in November to an all-time high of $US1.257 trillion, driven by a surge in investment in private residential and non-residential projects. At the same time, a US manufacturing index as measured by the Institute for Supply Management rose to 59.7 in December, beating market expectations, Reuters reported.

The greenback bounced 0.3 per cent on the day to 92.10 after falling 2.5 per cent over the last three weeks.

JP Morgan’s Niall O’Connor on Thursday said the rallies for the antipodeans had taken on a “clear, impulsive bias following last month’s reversals from important support levels”.

“For AUD/USD, the focus is now on the .7880/.7910 resistance zone which includes the mid-October high and will define whether a more sustained bullish shift can develop,” he said in a morning note.

The Aussie dollar has also rebounded against the yen and the euro.

Originally published as Australian dollar rebounds against stronger greenback