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THE dollar was trading 0.5c higher on the back of a strong US equities performance overnight, despite stronger than expected capital expenditure (capex) data released today.
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Date Posted: 24/11/10 20:41:17
Dollar rebounds after Korea conflict From: AAP November 25, 2010 12:57PM Increase Text SizeDecrease Text SizePrintEmail Share
Add to DiggAdd to del.icio.usAdd to FacebookAdd to KwoffAdd to MyspaceAdd to NewsvineWhat are these?THE dollar was trading 0.5c higher on the back of a strong US equities performance overnight, despite stronger than expected capital expenditure (capex) data released today.
At midday (AEDT) today, the dollar was trading at US98.17c, up almost US0.5c from yesterday's close of US97.68c.
Since 7am today, the local unit traded in a range between US98.12c and US98.49c.
CMC Markets foreign exchange dealer Tim Waterer said the local currency had been well supported as investors moved into risk assets but events in Ireland and Korea had capped it around current levels.
"By and large, it's been a pretty positive 24 hours for the Australian dollar," Mr Waterer said.
"The Australian dollar did drop off shortly after the capex number.
"The figures themselves were reasonably encouraging but it was a little bit difficult for the Aussie to push a whole lot higher in the aftermath given the concentration on international factors."
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US shares rose sharply overnight after a batch of economic data offered some hope that the US economy was improving.
The strength of the local unit overnight came despite ongoing concerns of conflict on the Korean peninsula.
South Korea and the United States will begin on Sunday a naval exercise involving a US aircraft carrier, in response to the attack.
Ireland unveiled a 15 billion-euro ($20.64 billion) austerity package on Wednesday needed to secure an international bailout, slashing public sector pay, pensions and welfare but refusing to hike corporation tax.
"Taken in isolation, the capex result is not bad this morning, but it hit some resistance up around the 98.50 region," Mr Waterer said.
"It didn't get the kick along that it perhaps otherwise would have if we didn't have the situation(s) in Europe or... Korea."
He predicted the local unit would be capped at US98.50c amid thin trading volumes during the offshore session.
Meanwhile, the Australian bonds market was weaker at noon.
At midday on the ASX 24, the December 10-year bond futures contract was at 94.465 (implying a yield of 5.535 per cent), down from yesterday's close of 94.520 (5.480 per cent).
The December three-year bond futures contract was at 94.780 (5.220 per cent), down from 94.830 (5.170 per cent).
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