Aussie dollar gains ground in late trade

The local unit has bounced against the greenback in afternoon trade, buoyed by higher commodity prices.

The local currency bounced from US76c at midday, on the back of a lift in commodity prices.

The Australian dollar has recovered in Tuesday trading to close slightly up against the greenback, ahead of the release of key inflation figures on Wednesday.

At 5pm (AEDT) on Tuesday, the local unit was trading at US76.34 cents, up from US76.25c on Monday.

The local currency lost ground against the greenback in morning trade but bounced from US76c at midday, on the back of a lift in commodity prices in Asian trading during the afternoon session.

“The Aussie did finally get some momentum — essentially during the Asian session as the commodity rally got underway,” Westpac senior currency strategist Sean Callow said.

Matt Simpson, senior market analyst at ThinkMarkets, said the key for the Aussie — which was heavily sold off following soft employment data last Thursday — will be the long awaited inflation numbers for the September quarter on Wednesday. “Markets are fully aware that it’s all about inflation this week, domestically,” he said.

The Aussie could recover if underlying inflation — which strips out the effects of volatile price movements — comes in around 1.5 per cent over the year, Mr Simpson said.

AAP