The Aussie dollar continues to surge towards parity with the US dollar, reaching US97.3c overnight and hitting parity with the Canadian dollar, affectionately known as the ‘loonie’.
The Aussie dollar was trading at US96.08c on Tuesday but stagnated briefly until trading last night and hasn’t traded this high since July 2008 when it was trading at US98.51c, its highest level since 1983.
Expectations are for the Aussie dollar to continue to appreciate, with this morning’s increase attributed concerns the US Federal Reserve will engage in another round of quantitative easing (keeping interest rates at zero, and ‘printing more money’) to bolster domestic demand, as a result there was a flight of currency from the US to ’safe’ currencies such as Australia and New Zealand which will better hold their value.
In trading overnight the Aussie dollar attained parity ($1=$1) with the Canadian currency the ‘loonie’ for the first time since 2004, but fell slightly in early morning trade.
For Australian exporters, the appreciation of the Australian dollar is bad news if you are dealing in US currency, however for exporters to Asia the Australian dollar is steady at 81.07 yen and similarly steady against other Asian currencies.