The Australian dollar has continued its rally on the back of positive retail sales and international trade figures.
Early on Friday, the local currency was trading at 93.48 US cents, up from 93.32 cents on Thursday.
The currency got a boost on Thursday from the release of official figures showing retail sales rose for the second month in a row in July, and were up 5.9 per cent in the year to July.
Meanwhile, Australia’s trade deficit fell for a second straight month, beating economists’ expectations.
“The Australian dollar extended its gains on the back of stronger trade numbers,” BK Asset Management managing director Kathy Lien said.
Investors would now await the release of US non-farm payrolls figures on Friday night, Australian time, Lien said.
The euro plummeted against other major currencies after the European Central Bank trimmed interest rates and announced an asset-purchase plan to counter deflation pressures.
The euro skidded to $US1.2952 ($A1.40), creeping below $1.30 for the first time since July 2013. The single currency also fell against the Japanese yen and the British pound.
Amid worries that the eurozone single currency area is threatened by stagnant growth and deflation, the ECB cut its main “refi” refinancing rate to 0.05 per cent from 0.15 per cent.
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The bank also lowered its deposit rate and marginal lending rate and said it would undertake purchases of securities on a large scale to inject cash into the economy.
The moves reflects the central bank’s recognition that “they were running out of time,” said Boris Schlossberg, managing director at BK Asset Management.
“They realised that the situation is pretty severe,” Schlossberg added. “They simply can not do nothing, they have to do some kind of reaction to stimulate demand.”
David Song, currency analyst at DailyFX, said the dollar could advance further against the euro if Friday’s US Department of Labor jobs report for August exceeds expectations.
“The bullish sentiment surrounding the US dollar may gather pace throughout the remainder of the year, as a growing number of central bank officials show a greater willing to normalise monetary policy sooner rather than later,” Song said.
