Higher Australian dollar edges up with commodity demand
External factors especially higher commodity demand from Australia's trading partners will further trigger the rise of the Australian dollar, which is still seeking parity with the U.S. dollar.
The US dollar losing against other currencies and gold and silver prices hitting new highs will give the Australian currency a further push and edges near parity with the US dollar.
The strong Aussie dollar, however, which so far is at its highest since it was floated in 1983, is an indicator of a robust Australian economy.
The government led by Treasurer Mr. Wayne Swan and economists are one in saying that artificial interventions to weaken the currency to please some sectors is not the way to go at the moment.
According to National Australia Bank group chief economist Mr. Alan Oster, the increase in the value of the Aussie dollar had so far speed up economic growth.
"The stronger currency will not weigh on Australia's major commodity exports comprised of iron ore, which are quite market driven because of demand," Mr. Oster told the International Business Times-Sydney in an interview.
Mr. Oster said that some manufacturing companies will have higher logistics and distribution costs, but it also gives them a competitive advantage in markets overseas. He added that so far the Aussie dollar's value has not changed as against other European currencies.
Parliament efforts to intervene and lower the Australian currency's value would "encourage retaliation from our trading partners, not something that's in the interests of our export industries," Swan in remarks today to parliament.
Australia's currency advanced as gold futures for December traded near the record $1,376.70 reached last week. The country is the world's largest exporter of gold. Equity markets rallied in the U.S. session after Citigroup Inc.'s earnings had beaten estimates.
The Australian currency increased to 99.32 U.S. cents at 2:37 p.m. in New York from 99.07 cents Oct. 15, when it rose as high as $1.0004. The currency declined 0.1 percent to 80.62 yen. New Zealand's dollar rose 0.3 percent to 75.87 U.S. cents, and traded at 61.51 yen.