Dollar tops US77 cents

The local unit has continued to surge following Glenn Stevens’ speech, amid a stronger iron ore price.

Generic photo of one Australian dollar. cahh currency coin $1. Picture: istock

The Australian dollar has topped US77 cents in late trade on Wednesday, surging to its highest point since late April amid support from stronger global equity markets and a firm iron ore price.

At 5.30pm (AEST), the local unit was trading at US77.03 cents, up from US76.72c on Tuesday.

Reserve Bank Governor Glenn Stevens delivered his final speech before retiring in September, saying economic recovery can’t be achieved through lower interest rates alone.

Mr Stevens said government spending had to play a role, as long as it was target and projects likely to create job and support productivity growth.

“We can’t just assume that monetary policy can simply dial up the growth we need. We need some realism here,” Mr Stevens told a luncheon of economists.

The US dollar had lost ground overnight after a weak report on US productivity suggested the US economy may not be growing as quickly as anticipated. Commonwealth Bank of Australia chief currency strategist Richard Grace said all major currencies had lifted against the US dollar on Wednesday. “The data that came out of the US last night (the productivity numbers) was a little bit on the soft side,” Mr Grace said.

- Dow Jones, AAP