Australia's currency pared yesterday's biggest loss in two months after central bank policy makers said there's a need for higher borrowing costs.
The Australian dollar rose to 92.27 U.S. cents as of 6:07 p.m. in Sydney from 92.21 cents late in Asia yesterday. It earlier fell to 91.29 cents, the lowest since Feb. 21.
Australia's dollar climbed against 10 of the 16 most-active currencies after the Reserve Bank of Australia said in minutes from its March 4 meeting released today that there is a ``need for further tightening'' and that the economy still ``faced a period in which inflation could be uncomfortably high.''
The Reserve Bank of Australia also said in the March 4 meeting's minutes that its quarter-percentage-point rate increase to a 12-year high of 7.25 percent would ``leave adequate flexibility to respond'' to changes in the economy.
Australia's dollar pared losses on speculation investors and exporters were seeking to take advantage of its biggest one- day decline in two months against the U.S. currency.
Exporters, who make up about a fifth of Australia's economy, attempt to purchase the currency at lower levels to increase the value of their overseas earnings.