THE Australian dollar jumped yesterday after the US central bank poured cold water on earlier speculation that it would soon start to withdraw economic stimulus.
The US dollar plunged early yesterday after the market was surprised by dovish comments by US Federal Reserve chairman Ben Bernanke, speaking at a conference in Boston. The central banker said "that highly accommodative monetary policy for the foreseeable future is what's needed for the US economy".
Late yesterday, the Australian dollar was at US92.8c, up from US92c on Wednesday. It traded as high as US93.07c, its strongest level in two weeks.
"Today's rally in risk assets was Bernanke-fuelled, with the Fed chairman lowering market expectations of imminent tapering of quantitative easing," said Tim Waterer, senior strategist at CMC Markets.
"The result was a sharp move higher in gold which served to give the Australian dollar an extra leg up today."
