The Australian dollar ended the local session three-quarters of a US cent higher as investors moved back into risk assets following the news of a bailout for the Irish government.
At the local close of trade, the dollar was buying 99.24 US cents, up from Friday’s close of 98.46 cents.
European finance ministers agreed early on Monday to a multi-billion euro bailout for Ireland, with funding from the European Union and International Monetary Fund.
In the past three years Irish government finances have been hit by costly banking sector rescues, a property market meltdown and the global recession.
Royal Bank of Scotland foreign exchange strategist Greg Gibbs said the local unit firmed, thanks to the the news from Ireland.
‘‘The Irish government accepting a bailout has helped risk appetite broadly in Asia. ‘‘So you’ve seen things like gold rally, the euro rally, Asian currencies strengthen, equities in Asia have performed well and the Aussie has also strengthened.’’
Mr Gibbs said he expected the week to be quiet for markets because of the US Thanksgiving holiday on Thursday but that the Australian dollar would likely strengthen.
He said Australian capital expediture data on Thursday should be a positive for the local dollar.
‘‘We’ve seen some big-announcement gas projects in recent weeks that could feed into a strong capital expenditure program in the forward extimates as well, Mr Gibbs said.
AAP