Interpac Business and Migration Solutions Melbourne Australia

（September 03,2010）

At 12pm (AEST), the local unit was trading at $US0.9109/11, up from yesterday's close of $US0.9072/75.

Since 5pm (AEST), the local currency traded between $US0.9088 and $US0.9116.

CMC Markets foreign exchange dealer Tim Waterer said the local unit moved up on reports that China was looking to diversify its foreign exchange reserves away from the traditional G4 currencies and into commodity currencies such as the Australian dollar and the Canadian dollar.

"Markets reacted to it, but I don't know how concrete it is at the moment," Mr Waterer said.

"There's talk coming out of China that there may be some growing interest in terms of the commodity currencies such as the Aussie dollar, and that's really behind the move from just below 91 cents to about 91.10 US cents.

"There appears to be some increased buying on that talk coming out of China."

But he forecast relatively subdued trade ahead of the release of US non-farm payrolls numbers during the offshore session.

"Ninety two cents is certainly within the realms of possibility, if not tonight, next week, but I think the gains for the local session will be capped somewhere around the $US0.9140 mark just because we've got a very big US jobs number."

"There appears to be some increased buying on that talk coming out of China."

But he forecast relatively subdued trade ahead of the release of US non-farm payrolls numbers during the offshore session.

"Ninety two cents is certainly within the realms of possibility, if not tonight, next week, but I think the gains for the local session will be capped somewhere around the $US0.9140 mark just because we've got a very big US jobs number."

(Source:theAustralian)