Aust dollar ends firmer for fifth day
28 Nov 2008 5:21 PM
SYDNEY, Nov 28 AAP - The Australian dollar ended firmer for the fifth successive session as a four per cent rally on the local share market reminded traders the economy was in good shape.
Expectations of a massive interest rate cut next week have failed to hinder the Australian dollar as optimist analysts say a recession will be averted.
At 1700 AEDT, the Australian dollar was trading at $US0.6561/65, up from Thursday's close of $US0.6500/04, marking the firmest finish since November 12.
During the day, the local unit traded between a mid-morning low of $US0.6541 and an early high of $US0.6584, with the US Thanksgiving holiday keeping the daily range tight compared with recent weeks.
A 4.1 per cent rally on the Australian share market's All Ordinaries index helped the local currency for most the day, although the late surge in equities failed to push the unit above its overnight high of $US0.6606.
The Australian dollar has held its ground this week, even though debt futures market are continuing to price in a 100 basis point interest rate cut on Tuesday.
A one per cent easing from the Reserve Bank of Australia, following its December 2 monthly board meeting, would take the cash rate to 4.25 per cent for the first time since May 2002.
Eleven of the 18 economists surveyed by AAP are expecting a smaller 75 basis point rate cut next week.
St George Bank head of foreign exchange Glenn Wittingslow said even with a big rate cut, Australian interest rates would still be high by world standards.
"Interest rates are still attractive by world standards," he said.
"The economy is attractive by world standards and commentators are saying we're able to avoid recession.
"The fact is, we have the Chinese being so keen to keep their economy going and the amount they want to spend on infrastructure means they'll acquire our raw materials, so that has to be good."
The Australian dollar was expected to trade within a tight range during the offshore session, with US traders expected to take an extra day off to create a long weekend.
CURRENCY TABLE: Currency snapshot at 1700 AEDT
CURRENCY SPOT PREVIOUS CLOSE
AUD/USD 0.6561-65 0.6500-04
AUD/JPY 62.54-59 61.83-90
AUD/EUR 0.5079-86 0.5030-37
AUD/NZD 1.1876-94 1.1796-16
AUD/GBP 0.4256-63 0.4225-32
EUR/USD 1.2914-17 1.2916-19
USD/JPY 95.30-33 95.13-15
EUR/JPY 123.07-12 122.86-91
(*Closes taken at 1700 AEDT Previous local session)
At 1600 AEDT, the Reserve Bank of Australia's trade weighted index was at 54.6, up from Thursday's close of 54.1.
