Investing.com – The Australian dollar approached parity with its U.S. counterpart on Thursday, rising to a record high after Singapore’s central bank unexpectedly tightened monetary policy, adding to selling pressure on the U.S. dollar.
AUD/USD hit 0.9994 during European morning trade, a record high; the pair subsequently consolidated at 0.9953, gaining 0.42%.
The pair was likely to find support at 0.9833, Wednesday’s low and short-term resistance at 0.9999.
Earlier in the day, the Monetary Authority of Singapore tightened policy, broadening the range of the Singapore dollar's trading band. The MAS cited "volatility across international financial markets" as a reason for its decision.
The central bank uses currency value rather than interest rates as its main monetary policy tool because foreign trade eclipses the island's domestic economy.
Immediately following the move, the U.S. dollar fell to a record low of 1.2886 against the Singapore dollar. The U.S. dollar had come under pressure in recent weeks amid expectations that the Federal Reserve will begin to implement further monetary easing if inflation remains too low or unemployment too high.
Meanwhile, the Aussie was down against the euro, with EUR/AUD gaining 0.30% to hit 1.4138.
Also Thursday, data showed that Australian inflation expectations rose for the second month in October after five straight months of declines. The Melbourne Institute said that its index of inflation expectations rose to 3.8% in October, up from 3.1% in September.
AUD/USD hit 0.9994 during European morning trade, a record high; the pair subsequently consolidated at 0.9953, gaining 0.42%.
The pair was likely to find support at 0.9833, Wednesday’s low and short-term resistance at 0.9999.
Earlier in the day, the Monetary Authority of Singapore tightened policy, broadening the range of the Singapore dollar's trading band. The MAS cited "volatility across international financial markets" as a reason for its decision.
The central bank uses currency value rather than interest rates as its main monetary policy tool because foreign trade eclipses the island's domestic economy.
Immediately following the move, the U.S. dollar fell to a record low of 1.2886 against the Singapore dollar. The U.S. dollar had come under pressure in recent weeks amid expectations that the Federal Reserve will begin to implement further monetary easing if inflation remains too low or unemployment too high.
Meanwhile, the Aussie was down against the euro, with EUR/AUD gaining 0.30% to hit 1.4138.
Also Thursday, data showed that Australian inflation expectations rose for the second month in October after five straight months of declines. The Melbourne Institute said that its index of inflation expectations rose to 3.8% in October, up from 3.1% in September.