The Australian dollar has reached an 11-week high, benefiting from weakness in the US dollar and growing uncertainty surrounding America’s debt crisis, the Herald Sun reports.
At noon (AEST), the Australian dollar was trading at 108.83 US cents, its highest value since May 11, and up from 108.13 US cents on Monday afternoon.
The domestic currency reached 110.11 US cents on May 3, a record high since the currency was floated in December 1983.
This morning, traders were awaiting a speech from US President Barack Obama, hoping it would provide some details about a solution to ongoing debt-ceiling negotiations.
Obama failed to provide any new information and this caused the US dollar to be sold-off and strengthened the Australian currency, said John Horner, foreign exchange strategist at Deutsche Bank.
In a rare primetime televised speech, the president rejected a Republican proposal to temporarily lift the debt limit, arguing it would leave the underlying problem unresolved and lead to a repeat of the current crisis in six months.
“The Obama speech didn’t deliver any progress on moves towards a resolution of the debt-ceiling issue,” Horner said.
Traders are now awaiting a speech from Australian central bank governor Glenn Stevens, due at 1305 AEST in Sydney.
“(We’re) waiting for what governor Stevens has to say, particularly to what extent he emphasises tomorrow’s CPI (consumer price index) data, given the importance placed on them in the July minutes (for the central bank’s board meeting) released last week,” Horner said.
Meanwhile, the Australian bond market was mixed at noon.