Dollar pushes higher

HE Australian dollar closed higher today as an improved appetite for risk on financial markets lifted demand for growth assets such as the local currency. 

At 5pm (AEST), the local currency was trading at $US0.8043/46, up 0.63 per cent from Thursday's close of $US0.7993/96. 

It was the highest close on the local session since June 12 when it finished at $US0.8149/54. 
During the day, the unit moved between $US0.8025 and $US0.8076. 

Westpac Banking Group senior currency strategist Sean Callow said the Australian dollar continued its rally from Thursday's offshore session on improved risk appetite on financial markets. 

The Dow Jones Industrial Average ended up 2.08 per cent, while the broad-market Standard & Poor's 500 added 2.14 per cent. 

The domestic currency started local trade at $US0.8026/28. 

"It made sense for the Aussie to get some support from a pretty strong close to US stocks,'' Mr Callow said. 

"It got some support from strong risk appetite in the US and it has carried on.'' 

With Asian equity markets positive in the past few days, Mr Callow said there was underlying demand for the Australian dollar. 
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Equity markets in Asia reflected an uplift in appetite for risk on financial markets, with the Australian All Ordinaries Index closing up 1.25 per cent and Japan's Nikkei index ending 0.83 per cent higher. 

"People are maybe a little less concerned about a substantial pull back in global risk appetite and equity markets,'' Mr Callow said. 

"For the short term at least people are buying the little Aussie. 

"Partly, the Asian growth story has not been shaken too badly in recent days.'' 

Economic events due for release in the US during Friday's offshore trade (AEST) include the core personal consumption expenditure price index for May and the final report of the University of Michigan's Consumer Confidence index for June. 

Mr Callow forecasts the Australian dollar to trade between $US0.7990 and $US0.8115 during Friday's offshore session.