THE dollar was slightly higher today despite falling briefly after a ratings downgrade for the nation’s big four banks.


At 1700 AEST today, the Australian dollar was trading at 106.24 US cents, up from 105.94 cents yesterday.

Since 0700 AEST today, the local unit traded between 106.07 US cents and 106.67 cents.

The Australian Bureau of Statistics today reported total hourly rates of pay, excluding bonuses, had risen by a seasonally adjusted 0.8 per cent in the March quarter, less than market expectations for a one per cent increase.

Westpac chief currency strategist Robert Rennie said there was continued demand for the Australian dollar throughout the day despite a couple of hiccups.

“It was a steady push higher on the day, he said.

“Prior to the data we had a bit of a wobble, so we briefly traded down to 106.07 US cents on the (wages) data.

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“Then during the afternoon it pushed higher to 106.67 US cent.”

Moody’s Investors Service downgraded the long-term debt ratings for Australia’s four largest banks from Aa1 to Aa2, citing their sensitivity to volatile wholesale funding markets.

Mr Rennie said the Australian dollar dipped on the news but quickly recovered.

He said the key drivers for the Australian dollar would most probably be the level of government debt in Greece and US.

The US government has reached its debt ceiling of $US14.3 trillion ($A13.47 trillion), which means it cannot borrow any more money to fund government operations until Congress and the White House agree to raise the ceiling.

Meanwhile, debt-laden Greece is trying get the European Union to bail it out or give it more time to make its repayments.

“Asia seems quite upbeat at the moment and then we start trading from a European and US point of view, we’ve got Greece, we’ve got the US to worry about and they are very legitimate worries, Mr Rennie said.

The RBA’s trade weighted index was at 77.7, steady from yesterday.

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