The Australian dollar is trading higher today after a lower than expected budget from Treasurer Joe hockey reaffirmed the countries triple AAA credit rating, which had been under threat for some time.
The Aussie currency hit a high of US79.98c up from US 78.88c in yesterday’s trade.
Commonwealth Securities chief economist Craig James said the budget was a factor in the dollar’s rise but the news about the credit rating was the major factor,
"The Aussie has benefited from the fact all three ratings agencies came out and said the triple-A rating was safe shortly after the budget, but it's the US dollar movement more than anything else." He said
The Australian dollar was also boosted by strong lending figures that hit the market which confirms some analysts’ predictions that the Reserve Bank of Australia is done with the latest rate cutting cycle.
The central bank has slashed the benchmark interest rate in Australia from 2.25% to 2% since February.
“Investment lending numbers were substantially better than expected,” noted IG market strategist Evan Lucas
“Along with home loans which suggests the RBA has another reason to move away from another rate cut,” he added.