Dollar soars to 6-week high on Obama win

THE Australian dollar rallied to a fresh six-week high on news US President Barack Obama had won a second term in office.

Dollar soars

THE Australian dollar rallied to a fresh six-week high on news US President Barack Obama had won a second term in office.

At 17.00 AEDT on Wednesday, the currency was trading at 104.63 US cents, its highest point in six weeks, up from 104.27 cents on Tuesday.

Easy Forex currency dealer Tony Darvall said news of Mr Obama's win in the Presidential election had pushed the US dollar lower, which provided a boost for other major currencies, including the Australian dollar.

He said that was partly because Mr Obama's win meant the US Federal Reserve was likely to continue its program of buying bonds to push down lending rates.

The Australian dollar would probably continue to rally overnight and could rise past 105 US cents, he said.

"The way the market is moving is higher and a re-test of the 105 US cent mark is on the cards," he said.

But he said concerns Mr Obama would struggle to reach a crucial agreement with the Republican-dominated

Congress to measures to bring down US debt in the next two months was likely to hurt the Australian dollar in the next few weeks.

If an agreement can not be reached, the US will face a so-called `fiscal cliff' of automatic spending cuts and tax increases in January.

"Traders are definitely going to use that as a catalyst for a move down," Mr Darvall said.

He said the major driver for the currency on Thursday would be the release of key official Australian employment data.

An AAP survey of 16 economists revealed a median forecast for the Australian Bureau of Statistics figures to show a 0.1 per cent rise in the unemployment rate to 5.5 per cent in October.