Surging iron ore and commodity prices could maintain support for the Australian dollar and help it above the 78 US cent level.

At 0700 AEST on Thursday, the local unit was trading at 77.97 US cents, up from 77.86 cents on Wednesday.

The Australian dollar rose to a fresh 10-month high of 78.28 US cents in overnight trade.

Westpac senior market strategist Imre Speizer said the currency was being supported by rising commodity prices, iron in particular, which has jumped to a 10-month high of $US60 a tonne.

“Daily momentum (for the Australian dollar) remains positive, nearby support at 77.70 US cents,” Speizer said in a note.

“Multi-month, we expect the US dollar to eventually find its feet and help drag the Australian dollar lower.

“However, over the next month, the US Fed’s cautious stance is likely to continue weighing on the US dollar, posing upside risks for the Australian dollar.”

The main local risk event for the Australian dollar on Thursday is the National Australia Bank’s business confidence survey.

AAP

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