THE Australian dollar closed more than a cent higher, assisted by gains on the Australian sharemarket and positive sentiment towards risk assets.
At 5pm (AEST) today, the Australian dollar was trading at $US0.8356, up 1.45 per cent from yesterday's close of $US0.8236.
Since 7am (AEST) today, the local unit traded between $US0.8280 and $US0.8332.
JP Morgan chief economist Helen Kevans said the local currency was aided by positive sentiment towards risk assets.
"The Australian dollar's been heading north all day," Ms Kevans said.
"One of the reasons is speculation that the government may back away from the resources tax and we may see some compromise on that tax going forward."
The Australian share market closed higher amid short-covering and expectations of the Government amending its proposed resources super profit tax.
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"The other reason is it has been a risk on day with investors getting back into riskier assets and riskier currencies and that's favoured the Aussie," Ms Kevans said.
She said the strength in equities was continuing to assist the local currency.
"That's got to do with it also," she said.
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