The Australian dollar is climbing towards US80 cents

THE recent surge of the Australian dollar is continuing as it moves above US79 cents following record gains overseas.

THE Australian dollar is back above 79 US cents - just.

At 10am AEDT today, the Australian dollar was worth 79.10 US cents, up from 78.79 US cents on Friday.

The US dollar fell to a more-than-three-year low against the euro on Friday, extending recent losses on expectations European Central Bank policymakers are preparing to reduce stimulus.

The euro’s rise weighed on the US dollar index, which measures the greenback against six rival currencies.

Reuters reported: “The index was down one per cent, after slipping to a four-month low of 90.954,” it said.

The Aussie dollar is also higher against the yen but has fallen against the euro.

Meanwhile, record gains overseas and a strong futures index are pointing to a good start for the Australian markets in the week ahead.

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The Australia dollar is enjoying a resurgence. Picture: RBA

“We have got a tremendous lead-in from overseas with record-breaking efforts from the United States with the Dow Jones up over 228 points,” CommSec chief economist Craig James told AAP.

“That does augur well for our market.”

However, he suggests iron ore prices that dipped on Friday could hold back Australian stocks. He noted the rest of the base metals were a mixed bag. Oil and gold prices went up — the latter by nearly $10 — which should strengthen the energy sector and gold stocks.

The US public holiday for Martin Luther King Jr Day could also lead to restraint in Australia’s markets.

“We’ll be working on Monday .... but we won’t get too much guidance then from the American markets for our Tuesday session,” Mr James said.

Several top-shelf financial indicators out this week — including December jobs figures, the ANZ-Roy Morgan consumer confidence, and November’s housing and lending finance numbers — are likely to steer both the Australian dollar and markets.

They’ll also factor into interest rate expectations for the Reserve Bank’s first meeting of 2018 in February.

There is some Chinese economic data due for release this week and the US earnings season got underway on Friday, with strong results from banks JP Morgan, BlackRock and Wells Fargo.

Originally published as The Australian dollar is climbing towards US80 cents