Dollar makes decisive move above parity

The Australian dollar has climbed back above parity with the greenback after hovering close to the mark since the start of the week.

A short time ago, the Aussie was trading at $US1.0028, up from 99.47 US cents late yesterday. The local unit fell to 99.26 US cents at about 7pm last night before reversing its fortunes early today, finally breaking through the mark shortly after 5am. It reached a peak of $US1.0034 shortly after 6am.

The dollar has flirted with parity since Monday, when it climbed to $US1.0009 but retreated soon after. Then at about 12.30am Thursday, the Aussie touched parity again before losing three quarters of a US cent in a matter of hours.

Today’s move above parity still leaves the dollar a long way off its 2012 peak. The Aussie hit $US1.0857 and the end of February before embarking on a sharp slide to below 96 US cents in early April.

Before Monday’s brief move above parity, the dollar last stood equal with the greenback on May 15.

The US currency fell overnight on data showing that initial jobless claims had risen, and inflation had declined, suggesting that the Federal Reserve Committee might take steps to fresh action to stimulate the sluggish US economy.

Australian shares are also likely to enjoy a positive start to the day. The futures market points to a gain of more than half a per cent after Wall Street and European markets posted solid gains.

US stocks jumped late in the day on speculation that major central banks were preparing coordinated action if the results of Greek elections this weekend generate turmoil in financial markets.

The news late in the trading day invigorated a US market that has been highly volatile this week, whip-sawed by concerns the ballot in Greece on Sunday may set the stage for the country’s exit from the euro zone, which could spark a fresh bout of global economic volatility.

BusinessDay with agencies

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