The Australian dollar has jumped sharply higher in a morning of volatile trading.
The currency hit a two-and-a-half year low of 94.35 US cents shortly after midnight on Friday before staging an impressive recovery.
It climbed almost two-and-a-half cents to a high of 96.74 US cents, before dropping the best part of one US cent.
This morning the currency was trading at 95.96 US cents, well up from 94.79 US cents on Thursday afternoon.
“It was extremely volatile. It jumped more than two US cents, which is huge,” Westpac New Zealand senior market strategist Imre Speizer said.
Speizer said the most likely catalyst for the move was a press conference from European Central Bank (ECB) president Mario Draghi.
Draghi indicated the ECB had no intention of implementing further stimulus measures to support the euro zone economy at this stage.
“That caused a fall in euro equities and a rise in the euro currency against the US dollar,” Speizer said.
“So, the Australian dollar rose because the US dollar fell.”
Stay informed, daily
Speizer said the Australian dollar was likely to spend Friday’s local session treading water ahead of the release of key US nonfarm payrolls figures.
The figures will give an indication of how the US jobs market is faring, which will help the US Federal Reserve to decide whether or not to start winding back its stimulus program sooner rather than later.
Speizer said the Australian dollar would likely rally if the employment figures were disappointing but would stay in its current range if the figures were better than expected.
Want to see more stories from InDaily SA in your Google search results?
- Click here to set InDaily SA as a preferred source.
- Tick the box next to "InDaily SA". That's it.
