Dollar hovers near five-month high

The Australian dollar was little changed near a five-month high after a quiet day of trade having kept most of the gains made in the past 24 hours.

At the close of local trade, the dollar was buying 93.28 US cents, up from Monday’s close of 93.20 cents. It reached 93.62 cents overnight, the highest since April 15.

CMC Markets foreign exchange dealer Tim Waterer said there was little impetus for the local unit to push higher during the trading day.

‘‘It’s kept in a fairly tight range, but it held onto its overnight highs.’’

The local dollar rose 1 US cent during Monday’s trading day on the back of official Chinese data showing consumer prices rose 3.5 per cent on year in August, compared with 3.3 per cent the previous month. It was the fastest pace since October 2008 - the height of the global financial crisis when consumer prices rose four per cent - and above the government’s annual target of 3 per cent.

But the unit’s rise wasn’t to be repeated during Tuesday’s domestic session, despite the publication of an upbeat private sector business survey.

Business confidence rebounded to levels last seen in April as profits improved although sales and employment conditions weakened, the National Australia Bank business confidence survey showed.

The data also showed business conditions were unchanged at an index reading of 5 points in August.

NAB said employment conditions were at the lowest level this year, although still in positive territory, with the index falling to 3 from seven the month before.

Mr Waterer said there was potential for the unit to trend higher on Tuesday night with the release of US Advanced Retail Sales by the US Census Bureau. Investors have been waiting for the data since Monday, Mr waterer said.