US dollar treading water

THE Australian dollar has crept higher against its US counterpart, hitting 80 US cents, as the US dollar slides around.

THE Australian dollar has crept higher against its US counterpart, hitting 80 US cents, as the US dollar slides around, most other major currencies tread water but commodity currencies slip.

At 0635 AEST on Tuesday, the Australian dollar was worth 80.00 US cents, up from 79.80 US cents on Monday.

Westpac’s Imre Speizer said most major currencies trod water until end of month fixing interest prompted a slide in the greenback.

“Other majors were treading water until end month/fixing interest caused USD to slide in late EU (European) trading causing EUR/USD to push to 1.1800, GBP/USD 1.3200 and USD/JPY to slip below 110.50,” he said in a Tuesday morning note.

“Despite firm bulks, commodity currencies underperformed in quiet trading with AUD and NZD struggling despite the late USD slip.”

The major event risk for the Australian dollar on Tuesday will be the Reserve Bank of Australia’s interest rate announcement, although most analysts expect the central bank to keep its cash rate on hold at the record low of 1.5 per cent.

“The AUD / USD is vulnerable to correcting further towards 0.7900 and is RBA focused,” Mr Speizer said. The local currency is down against both the yen and the euro.

CURRENCY SNAPSHOT AT 0635 AEST ON TUESDAY

One Australian dollar buys:

* 80.00 US cents, from 79.80 on Monday

* .8822 Japanese yen, from .8830 yen

* 67.59 euro cents, from 68.01 euro cents

Originally published as US dollar treading water