The Australian dollar is back above 79 cents as commodity prices soar

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The Australian dollar has opened the new trading week above the US 79 cent level, consolidating upon the gains achieved during Friday’s session.

Here’s the Aussie dollar scoreboard as at 7.45am AEST.

AUD/USD 0.7922 , -0.0005 , -0.06%
AUD/JPY 86.56 , 0.01 , 0.01%
AUD/CNH 5.2919 , 0.004 , 0.08%
AUD/EUR 0.6736 , 0.0009 , 0.13%
AUD/GBP 0.6154 , 0.0003 , 0.05%
AUD/NZD 1.0824 , 0.0039 , 0.36%
AUD/CAD 0.9969 , -0.0008 , -0.08%

Having hit a low of .7866 in early Asian trade, the AUD/USD ground higher throughout the course of Friday’s session, assisted by surging commodity prices and renewed US dollar weakness.

“The USD was softer across the board with commodity linked currencies the big winners,” said Rodrigo Catril, currency strategist at the National Australia Bank.

Crude oil futures surged by 3% on Friday, mirroring a similarly-sized gain in iron ore spot markets.

As a commodity-linked currency, the Aussie dollar understandably outperformed during the session, seeing the AUD/USD trade as high as .7944 before finishing the day buying .7927.

AUD/USD 5-Minute Chart

Turning to the day ahead, there’s nothing on the economic events calendar that appears likely to generate any volatility in the Aussie.

“The lack of catalysts locally means that its fortunes are going to be driven from offshore,” says Greg McKenna, chief market strategist at AxiTrader.

McKenna says that movements in Chinese commodity futures, along with sentiment toward the prospects for the US dollar going forward, appear to be the most likely catalysts to spark some movement in the Aussie.

He thinks that it will probably be tough for the AUD/USD to overcome the .7960 level today, although he says a break higher would signal a run toward .8020.

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