The Aussie dollar has reversed its recent decline to GFC levels on the back of positive messages from the European Central Bank and rising oil prices
The Aussie dollar has soared after comments from the head of the European Central Bank boosted prospects of further stimulus.
At 0700 AEDT on Friday, the local unit was trading at 69.87 US cents, up from 68.92 cents on Thursday.
‘Markets flipped into risk-seeking mode, helped by dovish signals from the ECB,’ Westpac strategist Imre Speizer said.
The ECB left interest rates unchanged as expected, but president Mario Draghi said turmoil in financial markets and China concerns would prompt a March review of the bank’s monetary policy.
‘He said downside risks to the inflation outlook had risen since the December meeting,’ Mr Speizer said.
Mr Speizer said commodity currencies like the Aussie also got a boost from a rally in beleaguered oil prices, with Brent crude rising nearly 5.5%.
Mr Speizer tipped the currency’s corrective bounce to extend further on Friday, with 70.15 US cents the next target.
AAP
