The Australian dollar broke through the 96 US cent barrier on Monday to reach a two year high, buoyed by a strong US equities performance on Friday.
The local currency hit its highest level since it touched 97.92 US cents on July 25, 2008.
At 0700 AEST, the Aussie dollar was trading at 96.15 US cents, up from Friday’s close of 94.91 cents.
Since 1700 AEST on Friday, the local currency traded between 94.91 cents and 96.15 cents.
Westpac New Zealand senior market strategist Imre Speizer said the local currency gained more than one US cent during the offshore session.
“US equities closed much higher,” Mr Speizer said.
“Much of the boost was around the US durable goods data. Excluding transportation, that indicator was much better than
“If you were to guess the direction or bias today, you would have to say it is upwards.”
Mr Speizer said there was only “very minor resistance” from Friday night’s session.
“It’s likely to test that and make a new high,” Mr Speizer said.
Last Wednesday, the Australian dollar pushed up to 96 US cents.
New York’s Dow Jones index rose nearly two per cent to end the week as economic data continued to show the prospect of a double dip recession in the world’s largest economy is weakening.
Figures showed orders for big-ticket items decreased in August at a slower than expected rate, and traders found comfort in the fact that orders of items such as household appliances rose by a more-than-expected two per cent.
The manufacturing industry is seen as one of the main engines pulling the US economy out of one of its worst recessions in decades.
In the absence of any local economic data on Monday, Mr Speizer predicted the local unit would trade around the 96 US cent level.
“Once the US equity futures get going I think that will be the main driver.”
He said there were “reasonably high” chance the local currency would touch the two year high in the upcoming sessions.
“It’s got good momentum behind it and it’s only two and a half cents away from that peak, so there’s every chance it will get up there.”
CURRENCY TABLE: Currency snapshot at 0700 AEST
CURRENCY SPOT PREVIOUS CLOSE
AUD/USD 0.9612-17 0.9490-92
AUD/JPY 81.02-04 80.08-10
AUD/EUR 0.7122-32 0.7127-32
AUD/NZD 1.3059-73 1.3015-18
AUD/GBP 0.6078-82 0.6051-56
EUR/USD 1.3485-90 1.3314-15
USD/JPY 84.23-27 84.39-42
EUR/JPY 113.60-66 112.35-38
(*Closes taken at 1700 AEST previous local session)