Aussie rises against greenback amid gloomy US outlook
The Australian currency opened higher on Wednesday after the US Federal Reserve announced stimulus measures to aid the weakened US economy.
At 0700 AEST today, the domestic unit was trading at $US0.9134/36, an increase from Tuesday's finish of $US0.9117/21.
Since 1700 AEST yesterday, the Aussie range from $US0.9061 to $US0.9161.
The US central bank announced overnight it would keep low interest rates and inject more cash into the economy amid slow growth and high unemployment.
In its statement, the Federal Open Market Committee (FOMC) lowered its assessment of the US economy, saying the pace of recuperation in output and employment has lagged in recent months.
The gloomy US economic outlook boosted the Australian currency, according to Bank of New Zealand currency strategist Mike Jones.
"Effectively, the Fed's provided a top up for US monetary stimulus and that easing (of monetary policy) saw the US dollar and US bond yields fall.
"So we're seeing the Australian dollar rise by default and that arrested the earlier decline in the Aussie, so it finished the night roughly where it started.
"In terms of the outlook from here, we'll probably see the US dollar remain on the defensive."
Mr Jones said China retail trade and industrial output scheduled for release Wednesday would be crucial for the outlook of the Aussie.
"If we see any signs of slowing in the Chinese economy that's going to be taken as a negative for global commodity prices and the Australian dollar accordingly," he said.
"Whether the Aussie can push up through 92 (US cents) is going to depend on that Chinese data and if it's stronger than what people think then the Aussie may re-test that 92 level today."