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SYDNEY - The Australian dollar has closed almost one US cent higher after after a positive finish on Wall Street supported investor confidence.
The local currency was stronger despite data showing the Ausralian economy had grown at its slowest pace in eight years.
At 1700 AEDT, the Australian
dollar was trading at US$0.6447/52, up almost one US cent, or 1.4 per cent, from Tuesday's close of US$0.6357/60.
During the day, the local unit traded between a low of US$0.6388 and a high of US$0.6474.
The Australian dollar's main move for the day came at the start of the local session, which coincided with the last hour of trade on Wall Street.
The local currency broke above US$0.6400 as the Dow Jones Industrial Average closed up 3.31 per cent, the S&P500 index advanced 3.99 per cent and the NASDAQ ended the New York session up 3.70 per cent.
The unit traded within a tight range for the rest of the local session, but outperformed other commodity currencies such as the Canadian and New Zealand dollars.
It was unmoved after the latest gross domestic product (GDP) figures showed the Australian economy grew by 0.1 per cent in the September quarter, for an annual pace of 1.9 per cent.
RBC Capital Markets senior currency strategist Sue Trinh said the GDP data was broadly in line with market expectations and prompted little reaction.
"The Aussie has basically traded sideways throughout the day," Ms Trinh said.
Ms Trinh said the weak growth numbers reaffirmed market expectations of more interest rate cuts from the Reserve Bank of Australia (RBA), but indications were that they might not be as aggressive as recent months.
She said the cumulative 300 basis point easing so far, as well as the fiscal stimulus package, falling petrol prices and a lower Australian dollar would help support economic growth.
"There's a lot that will help avert a recession in Australia, which puts it on a pretty good footing relative to its G10 peers," Ms Trinh said.
"On that basis, the Aussie dollar is rightly outperforming on a cross basis."
Direction during Wednesday night's (AEDT) offshore session was expected to come from equity markets, as well as the ADT employment report and ISM non-manufacturing survey for November due in the United States.
Currency table
CURRENCY SPOT PREVIOUS CLOSE
AUD/USD 0.6447-52 0.6357-60
AUD/JPY 60.11-17 59.22-26
AUD/EUR 0.5071-78 0.5043-50
AUD/NZD 1.2169-89 1.2039-62
AUD/GBP 0.4327-34 0.4275-84
EUR/USD 1.2708-10 1.2599-02
USD/JPY 93.23-27 93.12-13
EUR/JPY 118.49-53 117.32-36
At 1600 AEDT, the Reserve Bank of Australia's trade weighted index was at 54.0, up from Tuesday's close of 53.7.
- AAP
