The Australian dollar, trading at a two-week high against the US dollar, may rise once China's economic growth figures are released at noon, an analyst said.
The dollar was trading at 80.34 US cents this morning, up 0.82 per cent, from Wednesday's close of 79.63 US cents, as investors dumped the safe-haven US dollar on growth hopes ignited on Wall Street.
The Australian dollar "is sitting comfortably above 80 US cents this morning, with a chance to extend these gains if today's China's GDP data surprises to the upside," ANZ economist Riki Polygenis said in a research note.
China is due to report its second quarter gross domestic product at noon, Australian time. Analysts surveyed by Bloomberg expect it to rise to 7.8 per cent from 6.1 per cent in the first quarter.
Australia's resource-dependent economy is tied to Asian, and particularly China's, demand for iron ore and other minerals used in industrial production.
China's economy is widely considered one of the few engines of growth, in a downturn that has put most of the world's economies in reverse.
HiFX currency analyst Derek Mumford said stronger-than-expected China growth data would ''underpin'' the positive sentiment generated by the stronger US profits and comments by the Fed that the US recession may be ending.
Overnight, chip maker Intel posted better than expected profits, while minutes from the Fed's latest meeting showed the US central bank raised the possibility that the recession may soon end.
''The economic contraction was slowing and that the decline in activity could cease before long,'' the Fed said in its June meeting minutes.
But HiFX's Mr Mumford doesn't expect the Australian dollar to rise past 80.60-80.75 US cents ''because it has moved so sharply'' in recent days.
More likely, ''you might see some short-term traders taking profit before it moves higher overnight.''
czappone@fairfax.com.au
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