Australian dollar on track for US77c

The Aussie dollar is higher following disappointing US data and strong local GDP figures.

The Australian dollar is up against the greenback following disappointing US services figures and local data showing that Australia has notched up 25 consecutive years of economic growth.

At noon (AEST), the local unit was trading at US76.67 cents, up from US76.39 cents yesterday but down from US76.88c at 7am (AEST).

Australia’s gross domestic product rose 0.5 per cent in 2017 second quarter, compared to the first quarter, underpinned by domestic demand. The rise marks 25 straight years of growth.

The Australian dollar edged down on the data, slipping 0.1 of a cent to US76.6c at 11.35am (AEST), but largely clung to its overnight gains.

Earlier, the greenback and US bonds fell sharply in response to data showing that the US services sector slowed expansion in August. The market had expected an uptick.

Westpac senior market strategist Imre Speizer said: “Coming in the wake of last Friday’s disappointing payrolls report, it led markets to reduce expectations of higher Fed policy (Federal Reserve interest) rates.

“The US dollar-led upside break last night has swung momentum (for the Aussie dollar) to positive, 77 US cents now vulnerable.”

AAP