The Australian dollar has jumped more than 1.5 US cents after US Federal Reserve chairman Ben Bernanke declared American stimulus measures would continue.
The local currency hit 92.97 US cents shortly before 9.30 this morning SA time, only four hours after sinking below 91 US cents.
It was at 91.96 US cents at close on Wednesday.
Dr Bernanke’s address in Cambridge Massachusetts sparked a dramatic move in the dollar as he told a question and answer session that US interest rates were likely to remain low amid a weak American jobs market and contained inflation.
“If you put all of that together, you can only conclude that highly accommodative monetary policy for the foreseeable future is what is needed for the US economy,” he said.
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HiFX head of corporate trading Alex Hill said Dr Bernanke’s support for quantitative easing weakened the greenback, and pushed the Australian dollar higher.
“What we’re seeing now is the US dollar is actually weakening and the Aussie’s picking back up again,” HiFX head of corporate trading Alex Hill said from Auckland.
“Bernanke is talking to the market, … about how there is need for an `accommodative stance’ for some time to come.
“He’s going a step towards saying: `Look, don’t expect massive tapering of our asset purchase program at the moment’, suggesting that the unemployment rate really needs to get below 6.5 per cent in the States.”
The dramatic rise in the Australian dollar mirrors the sharp fall in the currency after Dr Bernanke last month suggested the Fed’s stimulus measures could end by mid-2014.
