THE Australian dollar has positioned itself above parity with its US counterpart and could move higher in the wake of this weekend’s Greek elections.
At 5pm AEST on Friday the local unit was trading at 100.16 US cents up from 99.48 US cents on Thursday.
It rose to 79.05 Japanese yen, up from 79.01 yen on Thursday and 79.36 euro cents, up from 79.14 euro cents.
ANZ foreign exchange strategist Andrew Salter said the Australian dollar rallied after the world’s biggest central banks indicated they were willing to stabilise markets in the event of a negative fallout to Greece’s elections by providing liquidity.
“That pushed us up to parity and we’ve just traded around there all day really,” he said.
News reports on Thursday night indicated central banks from the G20 group of nations, which makes up the world’s largest economies, were prepared to ensure cash was flowing through financial systems if severe market strains emerge on Monday.
Greek elections held last month saw the ruling coalition thrown out of office amid widespread anger over austerity measures imposed in order to obtain bailout funding from the European Union.
However, rival political parties were unable to form a government in the wake of that result, forcing the country to go back to the polls on Sunday.
The election has been seen as a referendum on the country’s membership of the euro zone with left wing part Syriza vowing to abandon the austerity measures if elected.
Mr Salter said the result of the election would have a major impact on financial markets.
“All eyes are on Greece at the moment.”