The Australian dollar stayed in sight of a 28-year high against the greenback on Friday, and looked set to close the year as one of the best performing major currencies, while its New Zealand counterpart held close to a five-week peak. Trading, however, was extremely light with most local investors already on holiday and others squaring off before the year end.
"They're random moves with very little liquidity in the market and just transactional things knocking it around," said ANZ senior dealer Alex Sinton. The Aussie was last at $1.0174, having traded in a slim range between $1.0152 and $1.0178 on the day. It peaked at a 28-year high of $1.0198 on Thursday, before a bout of profit-taking pulled it back.
"There is selling interest in $1.02-even and buyers at $1.0130. But there's not a lot of interest," a trader at a US investment bank said. This month alone the Aussie has risen around 6 percent versus the greenback, taking the year's gain to about 13 percent.
It is seen headed even higher in 2011, with some eyeing $1.05, bolstered by strong commodity prices like iron ore, Australia's top export, and expectations for further interest rate hikes by the Reserve Bank of Australia. Markets are pricing in about 50 basis points worth of hikes to the 4.75 percent cash rate over the next 12 months. On the year, it was up 22 percent against the euro, 19 percent versus sterling but barely changed against the yen. The Aussie, which hit a 10-year high around NZ$1.3505 last week, was currently at NZ$1.3163.
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