Dollar slumps on growing Trump optimism

THE Australian dollar has slipped with markets viewing US President-elect Donald Trump’s policies as inflationary.

THE Australian dollar has slipped with markets viewing US President-elect Donald Trump’s policies as inflationary.

At 0700 AEDT on Friday, the local unit was trading at 76.13 US cents, down from 76.74 cents on Thursday.

BK Asset Management managing director of foreign exchange strategy Boris Schlossberg said the US dollar had risen against the Aussie with continuing global investor optimism about a Donald Trump presidency.

“The capital markets have realised that the election of Donald Trump and a fully Republican Congress is likely to result in massive expansion of fiscal spending which, in turn, will likely spur growth and put upward pressure on US interest rates,” he said in a note.

“That has translated into a very strong bid for the dollar especially for USDJPY as US yields broke out above the key 2.00 per cent level on the benchmark 10-year bond.”

CURRENCY SNAPSHOT AT 0700 AEDT ON FRIDAY

One Australian dollar buys:

* 76.13 US cents, from 76.74 cents on Thursday

* 81.33 Japanese yen, from 80.84 yen

* 69.88 euro cents, from 70.14 euro cents

* 60.58 British pence, from 61.77 British pence

* 105.52 New Zealand cents, from 105.70 NZ cents

(*Currency closes taken at 1700 AEDT previous local session)

Source: IRESS