The Australian dollar lost a little ground today after weak building approvals data tempered expectations of an October interest rate hike.
At the local close, the dollar was trading at 96.82 US cents, down 0.21 cents from Wednesday’s close of 97.03 cents.
The Aussie reached its highest value since July 2008, when it reached 97.31 US cents overnight on Wednesday.
The currency dropped on Thursday following disappointing data from the Australian Bureau of Statistics showing residential building approvals fell by 4.7 per cent in August.
This prompted speculation that the RBA would be less likely to increase the cash rate when its board meets on Tuesday.
The futures market is now pricing in a 50 per cent chance the RBA will take the cash rate to 4.75 per cent in October, from its current 4.5 per cent.
Royal Bank of Scotland foreign exchange strategist Greg Gibbs said regardless of whether the RBA raises interest rates next week, all signs pointed to an appreciating Australian dollar.
‘‘I think the trend is quite firmly based and will probably continue to go up,’’ Mr Gibbs said. ‘‘I think quantitative easing is very likely to happen in the US and we’re very likely to raise rates, so all the reasons for the rally we’ve had are very strong.’’
Mr Gibbs said Thursday’s dip in the local currency was minor and that the upward trend would continue with the US dollar continuing to perform weakly.
AAP