SYDNEY: The Australian dollar bounced back above US78¢ before settling lower, as shareholders adjusted to the Reserve Bank’s surprise rate cut and as international stocks and oil costs climbed on renewed investor optimism, helped by Greece softening its stance towards debt reform.
At 7.30am AEDT, the local currency was trading US77.89¢, but had climbed to US78.48¢ overnight from US76.63¢ on Tuesday afternoon.
Australian shares are also in for a sharp bounce when the market opens at 10am AEDT local time. The benchmark S&P/ASX 200 is expected to climb 97 points, or 1.70 per cent, higher, according to SPI Futures market. Such a gain would build on Tuesday’s strong performance of a 1.46 per cent rise to 5707 points.
The gains follow a mix of US dollar weakness coupled with investors adjusting their positions helped after the RBA surprised the bulk of economists by lowering rates to 2.25 per cent, from 2.5 per cent. Rates had previously been unchanged since August 2013.
