The Australian dollar was trading nearly one US cent higher this morning, after a bi-partisan plan to avoid a US debt default emerged in the US overnight.
At 0700 AEST, the Australian dollar was trading at 107.32 US cents, up from 106.41 US cents yesterday.
Since 1700 AEST yesterday, the local unit traded between 106.41 US cents and 107.38 US cents.
HiFX trading director Mike Hollows said the Australian dollar had edged higher after US President Obama supported a plan to avoid US debt default.
A bipartisan group of US senators has offered a plan that could revive stalled debt talks. The deal proposes $US3.75 trillion ($A3.55 trillion) in savings over 10 years and contains $US1.2 trillion ($A1.14 trillion) in new revenue, Reuters reports.
“It looks like there is a glimmer of hope that they’ll have the deal done by August 2 and that has given the market encouragement,” Mr Hollows said.
The US dollar had been broadly weaker overnight as risk sentiment improved, he said.
Higher prices for commodities overnight also had boosted resource-driven currencies, such as the Australian dollar.
Copper touched its highest level in more than three months as upbeat demand prospects in two of the world’s biggest consumers helped to keep a surprisingly strong summer rally intact.
Mr Hollows said he expected the Australian dollar to trade between 107 US cents and 107.80 US cents during the domestic session today.
In economics news today, the Westpac-Melbourne Institute Leading Indexes of Economic Activity for July are due.
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