The Australian dollar has fallen more than half a US cent against its US counterpart which continues to experience weakness despite bouncing off a three-year low.
At 0635 AEDT on Monday, the Australian dollar was worth 79.16 US cents, down from 79.72 US cents on Friday.
The US dollar limped back from a three-year low against a basket of currencies on Friday but still marked its fifth weekly loss out of seven weeks so far in 2018.
Confidence in the US dollar has been hit by concerns Washington may pursue a weak dollar strategy, fears over the US current account and budget deficits amid a government spending spree and hefty corporate tax cuts, and the perceived erosion of its yield advantage as other countries start to scale back easy monetary policy.
Westpac’s Imre Speizer said that while US equities had reversed early gains to finish little changed, the US dollar had done the opposite, losing ground before retracing its steps.
‘The USD index closed 0.6 per cent higher on the day, after earlier falling to a fresh three-year low…. (while the) AUD initially rose to 0.7988 but later retraced to 0.7893,’ he said in a morning note.
He did not highlight any major domestic event risk that could hit the local currency on Monday and said it ‘should hover just above 0.7900 during the day ahead given little data and US markets closed’.
The Aussie dollar is also lower against the yen but higher against the euro.
CURRENCY SNAPSHOT AT 0635 AEDT ON MONDAY
One Australian dollar buys:
* 79.16 US cents, from 79.72 on Friday
* 84.27 Japanese yen, from 84.34 yen
* 63.79 euro cents, from 63.52 euro cents
(*Currency closes taken at 1700 AEDT previous local session)