The Australian dollar has continued its decline against its US counterpart which has continued to strengthen following Federal Reserve chair Jerome Powell’s hawkish comments to Congress.
At 0640 AEDT on Thursday, the Australian dollar was worth 77.84 US cents, down from 77.97 US cents on Wednesday.
The new Fed boss’ upbeat assessment of the us economy, assessed as a more hawkish signal from the central bank, encouraging some investors to believe it will raise rates four times this year rather than three.
And, that has sent the US dollar up against a basket of currencies.
Westpac analysts say the US dollar index had lifted 0.2 per cent to a six-week high, while the Australian dollar had ‘made a roundtrip from 0.7790 to 0.7820 and back’.
They said the key domestic even risk for the local currency would be fourth-quarter capital expenditure figures.
‘(They’re) expected to rise one per cent, (while) Westpac forecasts a 0.8 per cent increase with equipment capex rising one per cent and building and structures up 0.6 per cent’.
The local currency ‘retains downside risks, given the US dollar’s recent recovery’ with its next target likely to be 77.60 US cents.
The Aussie dollar is is also lower against the yen but unchanged against the euro.
CURRENCY SNAPSHOT AT 0640 AEDT ON THURSDAY
One Australian dollar buys:
* 77.84 US cents, from 77.97 on Wednesday
* 83.05 Japanese yen, from 83.48 yen
* 63.76 euro cents, unchanged
(*Currency closes taken at 1700 AEDT previous local session)