Confidence will remain fragile, but there is scope for a further tentative net advance for the Australian currency, potentially to 0.66 over the next 48 hours.

The Australian dollar again found support close to the 0.6330 level against the US dollar on Wednesday and regained some ground in New York.

Risk appetite secured a tentative recovery on hopes that US policy action will underpin the economy and this was a positive influence on the Australian currency, especially with some hope that the Chinese economy will stage a recovery.

The gains in gold prices were also a positive factor for Australia and it moved above the 0.64 level against the US currency on Thursday. The gains extended towards the 0.65 level later in the day as defensive plays faded.


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