The Australian dollar increased toward its three-week high against the world's reserve currency on Wednesday in advance of what is forecast to be a strong Australian labor market report, Bloomberg reports.
Also spurring the Aussie higher during the Wednesday trade session was speculation about vice chair Janet Yellen continuing stimulus-friendly policy in the U.S. should her nomination as next Fed chair be approved. The term of Ben Bernanke expires January 31. The South Pacific nation is set to release data about its labor market on Thursday.
"The Aussie is hostage to U.S. dollar developments," chief economist Besa Deda with St. George Bank Ltd. in Sydney told Bloomberg on Wednesday. "Weaker U.S. growth means weaker world growth. That means safe-haven flows and higher risk aversion, which generally work against Aussie dollar strength."
The Aussie edged up 0.1 percent against the greenback on Wednesday after having climbed as much as 0.3 percent earlier during the trade session.
The surge of the Australian dollar after news about the Yellen nomination was only believed to be a temporary response, according to The Sydney Morning Herald.
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