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Aussie dollar rallies on greenback weakness

Xinhua, August 3, 2016 Adjust font size:

The Australian dollar has rallied over two percent in offshore trade despite a Reserve Bank of Australia rate cut after the greenback fell to its lowest level since the end of June.

At the Asian open on Wednesday, the Australian dollar was trading at 76.09 U.S. cents, up from 75.48 U.S. cents at Tuesday's close.

Subdued U.S. payrolls data, weak car sales data and soft inflationary pressures weighed on the greenback overnight, supporting the Aussie despite the expected drop following the RBA cutting the official cash rate to 1.5 percent.

"Elevated money market pricing for an August RBA interest rate cut, firm iron ore prices and broad based U.S. dollar weakness supported the Australian dollar upleg," Commonwealth Bank of Australia senior currency strategist Elias Haddad said.

The Aussie dollar is expected to be supported in the near term as U.S. interest rate expectations continue to move against the greenback.

At 0923 local time (AEST), the Australian dollar is trading at 76.00 U.S. cents.

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