The Australian dollar closed higher on Thursday, staying above parity with the US dollar for the entire local session.
At the local close, the dollar was trading at 100.49 US cents, up from 99.68 US cents on Wednesday.
Early on Thursday morning, the US Federal Reserve announced it would spend $US600 billion to buy government bonds in an effort to stimulate the economy, pushing the dollar to a new post-float, 28-year high of 100.65 cents.
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Commonwealth Bank currency strategist Joe Capurso said the Australian dollar had been rangebound since it’s strong reaction to the Fed announcement.
‘‘There’s hardly been any change this morning in the Australian trading session,’’ he said. ‘‘It’s all really happened overnight after the US Federal Reserve released its results of its regular policy meeting.
‘‘That saw the US dollar weaken against all currencies including the Aussie dollar, and that’s what pushed the Aussie comfortably above parity early this morning.
‘‘I was a bit surprised at the currency reaction, given that it was roughly what was expected.
‘‘There were big movements in the various currencies against the US dollar in the 20 or so minutes just before the meeting.
‘‘It looks like there was a lot of different positioning that was going on just before that meeting."
Mr Capurso expects the local unit to stay strong in the coming months.
‘‘I think we’ll bob up and down just below and just above parity probably for months, probably early into the New Year, then ease,’’ he said. ‘‘The Aussie dollar is a pretty volatile currency. It can probably move about three or four cents a week.
‘‘It could be down to 97 or 98 cents before you know it.’’
