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Australian dollar hits 8-month high as commodity units rise

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The Australian dollar hit an eight-month high Monday as commodity-linked currencies got a boost on the back of a rise in global equity markets, with investors focusing on a string of central bank meetings.

[TOKYO] The Australian dollar hit an eight-month high Monday as commodity-linked currencies got a boost on the back of a rise in global equity markets, with investors focusing on a string of central bank meetings.

The Aussie currency bought 75.94 US cents in afternoon Tokyo trading, its highest level since July, while the New Zealand and Canadian dollars also got a boost.

A pickup in investor sentiment lifted demand for riskier, emerging currencies.

South Korea's won rose to its highest level in more than two months, while the Philippine peso gained 0.41 per cent and the Indonesian rupiah was up 0.58 per cent.

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The Bank of Japan started a two-day meeting Monday, while the Federal Reserve and Bank of England also hold meetings this week.

Markets are keen to see if Japanese policymakers unleash fresh stimulus, after launching a widely-panned negative interest rate policy in January, while the Fed talks will be watched for clues about a possible timeline for more rate hikes.

The meetings come after the European Central Bank last week cut rates and boosted its bond-buying in a bid to kickstart the tepid eurozone economy.

"Central banks are going to be dominating market sentiment," Matthew Sherwood, head of investment strategy at Perpetual Ltd in Sydney, told Bloomberg News.

"That could be enough for the risk rally to continue, but I think it is starting to run out of steam." But Chinese data at the weekend dragged on investor optimism owing to more evidence of a slowdown in the world's number two economy - a key driver of global growth.

In the first two months of the year, output at China's factories, workshops and mines was the weakest since the global financial crisis, official figures showed Saturday.

In other trading Monday, the dollar rose to 113.91 yen from 113.79 yen in US trade, while the euro changed hands at 127.11 yen against 126.87 yen.

The euro edged up to US$1.1158 from $1.1149 in New York.

AFP

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