The Australian dollar was up this morning to 93.79 US cents at 7 am, following a drop of 0.1 per cent in industrial output in the US tracked by the Federal Reserve.
The Australian dollar closed at 93.36 on Friday, before jumping this morning on the Federal Reserve’s data, announced on Friday US time, and comments by the Fed’s nominee as chair Janet Yellen supporting continuing economic stimulus.
Depending on the survey cited, manufacturing in the United States grew either weakly or strongly for October. The Federal Reserve’s result contrast with the “modest” expansion recorded in the Markit PMI (the overall result of 51.8 slightly above a score of 50, indicating no change), and the Institute for Supply Management’s index recording 56.4, the strongest result in that survey since April 2011.
Commenting on the impact of Yellen’s remarks on the Australian dollar, Westpac New Zealand senior market strategist Imre Speizer told AAP, "It was more the fact that she did not throw out any hawkish surprises in her testimony which caused the US dollar to fall."
"Then on Friday night, you had some disappointing US data which fitted that theme, the idea that Janet will not be doing any tapering this year."