Aussie dollar breaks US 98 cents

Last night, the Australian dollar broke the US$0.98 barrier for the first time in 25 years, posting at a peak of US$0.9849 before settling back into the high $US0.97 range.

Currency surges occurred following remarks made by US Federal Reserve chairman Ben Bernanke about the “uncertain” outlook of the US economy. “The possibility of higher energy prices, tighter credit conditions, and a still-deeper contraction in housing markets all represent significant downside risks to the outlook for growth,” said Bernanke in Congress yesterday.

Commodity prices have assisted the Australian dollar despite a fall in oil prices helping the US dollar regain some ground over the yen and euro.