Aust dollar opens stronger, rises to 5-week highs on weak $US

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Aust dollar opens stronger, rises to 5-week highs on weak $US

SYDNEY, Dec 13 AAP - The Australian dollar rose to five-week highs overnight as investorsdumped the United States currency on concerns of war with Iraq.

At 0700 AEDT, the Australian dollar was at $US0.5649/54 compared with $US0.5612/17from yesterday's close.

The Australian dollar surged to a high at $US0.5668 in overnight trade as the dollarbloc currencies again benefited from risk aversion trade and yield-hungry investors.

The US dollar was rocked overnight, falling across the board.

In European trade investors ditched the US dollar on worries that US economic datawould indicate a still soft economic recovery.

Also, a US newspaper article stating the US administration had a credible report thatIslamic extremists linked to al Qaeda received a chemical weapon in Iraq either last montor in October weighed on the US dollar.

Even, when the US economic data came in brighter-than-expected, the US currency couldnot find any great strength.

The US dollar quickly lost any gains it had made from an unexpected narrowing in theUS third quarter current account deficit and data showing US consumers were hanging inthere with US retail sales up in November.

On the cross rates the Australian dollar was up against the yen and British pound,but lost ground against the euro and New Zealand dollar.

JP Morgan strategists said while the local currency remained over $US0.5610, it waslikely to push towards the previous high around 0.5675.

CURRENCY TABLE: Currency snapshot at 0700 AEDTCURRENCY SPOT PREVIOUS CLOSEAUD/USD 0.5649-54 0.5612-17 AUD/JPY 69.32-37 69.23-28 AUD/EUR 0.5544-49 0.5562-67 AUD/NZD 1.1120-30 1.1174-84 AUD/GBP 0.3570-75 0.3563-68 EUR/USD 1.0183-88 1.0089-94 USD/JPY 122.69-74 123.33-38 EUR/JPY 124.97-02 124.46-51

(*Closes taken at 1700 AEDT previous local session)

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KEYWORD: AUST DOLLAR OPEN