The Australian dollar has rallied to a three-week high against the Australian dollar after a strong start to the year, with the Australian economy showing signs of recovery from the downturn.
The dollar rose to 97.5 US cents at 11:01am AEST on Monday.
The gain was fuelled by strong exports, a stronger dollar and the weaker US Federal Reserve policy, which has cut interest rates.
The economy grew by 1.1 per cent in the first quarter, compared with a 0.7 per cent increase in the previous quarter.
The Reserve Bank is currently forecasting a second quarter contraction of 0.6 per cent, according to data from the Bureau of Statistics.
Key points:The Australian dollar gained three-quarters of a cent against the US dollar to 97¢ on MondayThe Australian economy has grown by 0.1 percentage points since the first nine months of 2017The US Federal Bank is forecasting a 1.4 per cent contraction in the second quarterThis month has seen an increase in exports to the US, boosted by increased exports to China and the world’s largest economy.
In the first three months of the year the Australian Dollar was up by three per cent against US Dollar, while the Australian pound was down.
But this week the dollar has surged and is up by two per cent to 97 US cents, in a day when the Australian stock market is trading at its highest level in two years.
The currency has been buoyed by strong economic data in China and other parts of the world.
The Australian Government has also taken steps to boost domestic manufacturing, particularly in the sectors of machinery, vehicles and electronics.
The country’s manufacturing sector, which is responsible for over 90 per cent of GDP, is expected to grow by 0 to 2 per cent this year, according the Australian Industry Group (AIG).
The economy was expected to expand by 1 per cent last year, although economists expect the economy to shrink by about 0.2 per cent.
The latest jobs report is expected on Tuesday.
The AIG is forecasting the Australian Government will deliver an unemployment rate of about 9.5 per cent for the September quarter.