THE dollar was slightly higher today, proving resilient to the news that Japan had plunged back into recession.


At 5pm AEST, the Australian dollar was trading at 106.53 US cents, up from 106.24 cents yesterday.

Since 7am AEST today, the local unit traded between 106.23 US cents and 106.82 cents.

Today, gross domestic product data showed Japan had posted a second consecutive quarter of economic contraction in the March quarter, as the economy felt the impact of the March 11 earthquake, tsunami and the world’s worst nuclear crisis since Chernobyl.

CMC Markets currency strategist Tim Waterer said the Japanese economic growth announcement had little effect initially on the Australian dollar but there was some movement later in the afternoon.

“The US dollar started to attract a few more buyers, the gold price, the euro and the Aussie dollar started to come off its session highs.”

Start of sidebar. Skip to end of sidebar.

End of sidebar. Return to start of sidebar.

Mr Waterer said the gold price neared the $US1,500 an ounce level during the day.

“It got very close to pushing through that, but we saw momentum dry up for commodities during the afternoon session.

“The poor Japanese data was a reason for the move into safe-haven assets and that’s where the US dollar found support this afternoon,” he said.

“It wasn’t anything too dramatic, just enough to take the euro, gold and the Aussie off their session highs.”

Mr Waterer said markets would be focusing on Greek sovereign debt worries in the next few days.

“Traders will be looking at any market appeasing comments from ECB (European Central Bank) officials,” he said.

The market doesn’t react well to uncertainty and that is why the Australian dollar is running into some headwinds when it nears 107 US cents.

Key data due today AEST includes US April existing home sales, May manufacturing data and initial jobless claims.

The Reserve Bank of Australia’s trade weighted index was at 77.8, up from 77.7 yesterday.

Other articles you might like;