The Australian dollar closed slightly higher after being strengthened by a stronger euro on Tuesday afternoon.
At the local close, the dollar was trading at 98.55 US cents, up from Monday’s close of 98.18 cents.
CMC Markets foreign exchange dealer Tim Waterer said the Australian dollar bounced back after losing ground on the release of the Reserve Bank of Australia’s (RBA) November 2 board meeting minutes late on Tuesday morning.
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‘‘There was no sign in the comments from the RBA that they were in any sort of hurry to hike rates any time soon and that saw the Aussie dollar fall around 20 pips,’’ Mr Waterer said.
The RBA said strengthening economic activity and gradually rising inflation were key factors in its to lift the cash rate in November for the first time in six months.
The minutes also reveal the RBA board took into consideration that bank lending rates could increase by more than the cash rate.
Mr Waterer said he local currency rebounded in the afternoon "due to some strength in the euro’’.
‘‘We had some comments coming out from a Fed official in the US talking about how monetary policy settings in the US aren’t made with a view to strengthening or weakening the greenback,’’ he said. ‘‘We’ve seen the euro rally on the back of that and it’s dragged some other currencies up with it like the Aussie dollar.’’
Mr Waterer said traders would focus on the fortune of US equities and US Producer Price Index data due overnight trading.
‘‘We saw last night there was a very strong correlation between the AUD’s performance and the S&P500 ... so data aside, if we see US equities trade in positive territory that could push the AUD back above 99 US cents and any continuing weakness could keep the Aussie pinned around 98.50 cents.’’
