Australian dollar hits parity with US dollar
A final tribute to the fact that Australia's banks were deregulated -- while America's banks were regulated to death. The Australian unit has risen as the U.S. unit fell
THE Australian dollar has reached parity with the US dollar for the first time since the currency was floated in December 1983. The local current rose to $US1.00 at about 11.18pm (AEDT) in overseas trading. It was the first time since 28 July 1982 that the Australia dollar has traded about one US dollar.
Earlier on Friday the local currency was hovering around 99 US cents ahead of the release of US CPI data, retail figures and a Federal Reserve speech that could indicate how much quantitative easing will take place. Quantitative easing is a process whereby the US Federal Reserve increases the amount of US dollars in the economy by buying US Treasuries.
The Australian dollar touched a fresh 27-year high of 99.94 US cents overnight, the closest it has been to parity with the US dollar since it was floated in December 1983. At 5pm (AEDT) on Friday the Australian dollar was trading at 99.28 US cents, down from Thursday's close of 99.61 cents. Since 7am (AEDT), the local unit traded between 98.92 US cents and 99.46 cents.
Nomura Australia economist Stephen Roberts said traders had been waiting patiently throughout the domestic session in the absence of any local data. "It might be a bit of a patient wait for parity, but we will get there," Mr Roberts said.
He said the release of the US economic data and a speech by US Federal Reserve chairman Ben Bernanke would drive the momentum of the local currency. "Those factors will certainly have some influence," Mr Roberts said.