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Dollar recovers ground

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The Australian dollar is recovering losses made over the past few days, getting some help from rising copper and gold prices.

Early Thursday, the local unit was trading at 89.85 US cents, up from 89.53 cents on Wednesday.

Westpac New Zealand senior market strategist Imre Speizer said riskier asset such as the Australian dollar fell over the past few days because of negativity about the Ukraine crisis and and the Chinese economy but now they are bouncing back.

“The correction of the previous three days appears done, a rise to 90.50 US cents is on the cards today,” he said.

“Copper also rebounded from a fresh nine-month low.”

The dollar fell slightly against its New Zealand equivalent following the Reserve Bank of New Zealand’s (RBNZ) first change to its Official Cash Rate (OCR) in three years.

The RBNZ raised the cash rate by 0.25 percentage points to 2.75 per cent in a attempt to bring inflation under control.

The New Zealand dollar also rose against most other currencies.

Speizer said he expects the Australian dollar to further weaken against the New Zealand dollar because while the RBNZ is increasing its cash rate, further cuts to the Reserve Bank of Australia’s cash rate are possible.

 

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