CURRENCIES: Aussie Dollar Up On Higher Rate Talk

The Australian dollar took center stage in Asian trading Friday, jumping against the U.S. dollar on hawkish comments from Reserve Bank of Australia governor Glenn Stevens before paring gains as investors took profits.

The U.S. unit firmed against most major counterparts.

Stevens said in a prepared statement that "there will come a time when the exceptional monetary stimulus in place at present will no longer be needed. It will then be appropriate for the Board to do what it has done on past such occasions, namely to start adjusting interest rates back towards normal levels."

Later, he reportedly said he didn't want to specify what level "normal" monetary policy represented, but it was much higher than the present "emergency" setting of 3.0%.

The RBA cut a total of 425 basis points, or 4.25 percentage points, between September 2008 and April 2009, to help the Australian economy weather the global crisis.

Earlier this month, the RBA kept its policy cash rate steady as widely expected, and indicated it is moving away from an easing bias as the economy recovers.

The Aussie was buying 84.26 U.S. cents, compared with 84.25 U.S. cents in late North American trading Thursday. Earlier Friday, it rose as high as 84.77 U.S. cents.

The dollar was buying 95.29 yen, slightly down from 95.32 yen late Thursday.

The dollar index (DXY), which measures the U.S. unit against a basket of six major currencies, stood at 78.491, up from 78.390 late Thursday.

The euro was at $1.4262, down from $1.4304 late Thursday, and the British pound bought $1.6559, down from $1.6587.