The Australian dollar continues to climb against the greenback

Photo by Jonathan Griffith / Barcroft Med / Getty Images

The Australian dollar continued to climb against the US dollar in overnight trade, hitting a high of .7489 before easing modestly into the New York close.

Here’s the Australian dollar scoreboard as at 7.50am AEST.

AUD/USD 0.7473 , -0.0002 , -0.03%
AUD/JPY 83.17 , 0.02 , 0.02%
AUD/CNH 5.1402 , -0.001 , -0.02%
AUD/EUR 0.6648 , -0.0002 , -0.03%
AUD/GBP 0.5748 , 0 , 0.00%
AUD/NZD 1.0682 , 0.0003 , 0.03%

Yet again, the move was more about US dollar weakness rather than Australian dollar strength with the greenback falling to a fresh six-month low following remarks from German chancellor Angela Merkel that “the euro is too weak”.

Speaking in Berlin, Merkel said that was because of ECB policy meaning “German products are cheap in relative terms”.

That put a rocket under the euro, seeing it hit a six-month high of 1.1264 against the US dollar. It also ensured a modest rally in the US dollar in Asia was reversed despite the release of strong US economic data, helping to send the Aussie higher.

A continued rally in iron ore prices, along with strong gains in global stocks, also worked in the Aussie’s favour, at least against the greenback.

The AUD/USD daily chart below reveals the Aussie’s recovery over the past week.

AUD/USD Daily Chart

As was the case on Monday, there’s little on the economic calendar that appears likely to generate any short-term volatility in the Aussie.

In Australia, the weekly ANZ-Roy Morgan consumer confidence index is out while in Japan the flash manufacturing PMI for May will also be released.

While the latter will provide the first indication on health of the global manufacturing sector in May, it’s unlikely to generate much interest from traders.

Perhaps providing the most interest for traders, Charles Evans, Chicago Fed president, and Lael Brainard, Fed governor, will be in action during the Asia session.

Both are voting members on the FOMC this year, and are regarded as being more dovish than most.

Later in the session, markets will also receive flash manufacturing and services PMI’s from the eurozone, Germany, France and the United States. German business confidence, along with its second read on Q1 GDP, will also be released.

In the United States, new home sales, the Richmond Fed manufacturing index and weekly crude oil inventories from the API will also be released.

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