Australian dollar closes higher


The Australian dollar is higher after a comment from Reserve Bank governor Glenn Stevens that caused the local currency to fall to a three-year low was dismissed as a lighthearted remark.

At 1700 AEST on Thursday, the local unit was trading at 91.06 US cents, up from 90.62 cents on Wednesday.

Mr Stevens told a business function on Wednesday that the RBA had deliberated for "a very long time" before deciding to leave the cash rate at its record low of 2.75 per cent on Tuesday.

The unscripted comment sent the Australian dollar below 91 US cents and to its lowest level since September 2010.

But on Thursday RBA deputy governor Philip Lowe said the comment was a lighthearted remark that was "misinterpreted" by financial markets.

"I can confirm for you that the board did deliberate for a very long time," Dr Lowe said.

"I can also confirm for you that it always deliberates for a very long time."

CMC Markets foreign exchange dealer Tim Waterer said the clarification from Dr Lowe saw the Australian dollar recover some of the losses posted after Mr Stevens' comment.

"The clarification by the deputy governor today seemed to have added a little bit of forward momentum to the Aussie," Mr Waterer said.

"The fact that Lowe came out and did state that it was a lighthearted remark, that had traders thinking that maybe the Tuesday rates decision wasn't as close a call as they originally thought on the back of Stevens' comments yesterday."