Aussie dollar soars on oil price recovery

Aussie one dollar coins
ID:4843541

The recovery in crude prices combined with higher iron ore prices and a weaker greenback have pushed the Aussie dollar higher.

The Aussie dollar has surged more than one US cent on the back of an oil price recovery.

At 0700 AEST on Tuesday, the local unit was trading at 77.49 US cents, up from 76.50 cents on Monday.

Westpac senior market strategist Imre Speizer said oil prices initially fell 7.0% when producing nations failed to agree to cut output at a meeting in Qatar on Monday morning.

But, he said, prices had since bounced back and were only 0.4% lower early on Tuesday.

Mr Speizer said the recovery in crude prices combined with higher iron ore prices and a weaker greenback had pushed the Aussie dollar higher.

‘Sentiment was mostly positive, helped by a recovery in oil prices off the post-Doha low,’ he said in a note.

‘US interest rates (bonds) are higher, and the US dollar is weaker. The Aussie dollar and New Zealand dollar performed well given this mix.’

The main local risk event for the dollar on Tuesday will be the release of the minutes from the Reserve Bank of Australia’s April monetary policy meeting.

Meanwhile, RBA governor Glenn Stevens will make speech in New York on Tuesday night (AEST).

At 7am on Tuesday, 19 April one Aussie dollar was buying:

77.49 US cents, from 76.50 cents on Monday*

84.33 Japanese yen, from 82.60 yen

68.51 euro cents, from 67.75 euro cents

111.45 New Zealand cents, from 110.88 NZ cents

54.28 British pence, from 54.09 pence

*Currency closes taken at 1700 AEST previous local session

AAP