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Aussie dollar consolidates around 74 U.S. cents

Xinhua, November 23, 2016 Adjust font size:

The Australian dollar has consolidated around the 74 U.S. cent handle overnight following a speech from Christopher Kent,assistant governor and chief economist of the Reserve Bank of Australia.

At the Asian open on Wednesday, the Australian dollar was trading at 73.98 U.S. cents, marginally lower from the 74.02 U.S. cent close on Tuesday. By 10:17 local time (AEDT), the unit had edged back to 74.03 U.S. cents.

Though the greenback recovered from its selloff overnight, the Australian dollar was supported by gains in key commodities and Kent's reiteration the downturn in mining investment is 80 percent complete. The turnaround in Australia's terms of trade will also provide support to nominal growth.

"While Kent warned there will be some spare capacity in the labor market for some time, he noted the RBA liaison suggests there may be some wage pressure emerging," senior currency strategist of the Commonwealth Bank of Australia Elias Haddad said.

Overall, the speech underpins the view the Reserve Bank of Australia (RBA) will keep the official cash rate at the record low 1.5 percent over 2017, which is supportive of the Australian dollar, Haddad said. Endit