Aussie dollar holds atop $1

Aussie dollar holds atop $1The Australian dollar (AUD) hovered near record highs on the euro today and held comfortable above the US dollar as surging commodity prices gave it. Australia’s neighbor, New Zealand, also benefited from the AUD’s position.

Copper climb to new highs while oil cleared $91 a barrel and the CRB index of commodities reached levels last seen in late 2008 on optimism about global growth next year against a background of supply limitations for many resources.


Spot iron ore cleared $170 for the first time since May, auguring well for the booming mining sector.

The metal vies with coal as Australia’s biggest export.

The gains came despite the rise in Chinese interest rates over the weekend, suggesting investors were hopeful the tightening would help control inflation and sustain strong economic growth over the long term.

“For months now the knee-jerk reaction was that every tightening would somehow bring the economy crashing down,” noted a dealer at a thinly staffed Australian bank.

“Well it hasn’t happened and our economists are confident it won’t next year either,” he argued. “The Chinese are really being quite gradual in tightening, with an eye to sustainable growth. There’s no need to make such a drama out of it.”

The New Zealand dollar was firm at $0.7580, having pushed to a three-week high of $0.7609 overnight, with a dip on profit-taking attracting fund buyers.

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