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Australian dollar hits four-week high

The Australia dollar has hit a four-week high just short of 79 US cents, as the US dollar continues to slide.

The rise in the Aussie dollar appears to be more to do with what is going on in the US than what is happening in Australia.

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When the US Reserve Bank issued its monthly statement on interest rates earlier this month, the value of the US dollar took a pounding, which caused the Australian dollar to rise.

This dynamic has so far shown no signs of reversing.

Given the the Reserve Bank of Australia wants the dollar to depreciate in order to boost the non-mining sectors of the economy, the US dollar’s slide in value makes another cash rate cut highly likely.

Whether that cut comes at the RBA’s next meeting on April 7 remains to be seen. Currently 53 per cent of the market are betting on rates staying at 2.25 per cent in April.

In other financial markets news, the ASX 200 closed at 5,956 on Monday. Market analysts are predicting a rise today, though it doesn’t look like it will pass the symbolic 6000 mark.

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