$USD Bearish again

Submitted by Share Trading on 10 January, 2006 - 18:51

The Australian dollar opened slightly higher on Tuesday as the local unit continued to climb against a sagging US currency.

At 7am (AEDT), the local unit was trading at US75.44¢, higher than Monday's close of US75.33¢. During overnight trade, it reached a low of US75.04¢ and a high of US75.44¢.

"The corrective bias is on the dip so far, so we cannot rule out another shot higher, but we are closely monitoring resistance at the $US0.7580 December high," JP Morgan said. "Support starts at $US0.7485 and then 0.7445." The Australian dollar hit a 14-month low of US72.35¢ in late December and has since climbed as the US dollar retreats from previous strong positions.

The US currency has slipped since the start of the year, weighed down by expectations of a near-peak in US Federal Reserve interest rates and recent lacklustre employment data.

On Tuesday, the Australian Bureau of Statistics releases its November trade balance data, which economists expect to be significantly higher than the October read due to a statistical distortion.