The Australian dollar has continued its slide against a steady US dollar that is hovering near an 11-month peak against a basket of major currencies as China’s signal of tolerance of a stronger yuan offset anxiety about the global trade conflict.
At 0635 AEST on Thursday, the Australian dollar was worth 73.69 US cents, down from 73.99 US cents on Wednesday
The greenback has remained well supported as traders brace for another possible round of US tariffs against China.
US Commerce Secretary Wilbur Ross said the White House would likely keep up pressure on Beijing in an attempt to reach a deal on greater American access to Chinese markets and narrow its trade surplus with the US.
That could impact China’s demand for commodities.
Westpac analysts said overnight news also included figures showing that the US current account deficit had narrowed in the first quarter as well as a revised fourth quarter, due to investment flow from the US corporate tax changes.
‘At 2.5 per cent of GDP (gross domestic product), the deficit is stable, manageable and benign on an historic basis,’ they said in a morning note.
But there also had been lower-than-expected existing house sales and lingering concern over Brexit remains.
‘Existing home sales for May (5.43 million) fell short of market expectations (5.52m)’ attributed to a lack of affordable supply on the low completions.
‘The US dollar index is up 0.1 per cent on the day. EUR ranged sideways between 1.1540 and 1.1600. USD/JPY rose from 110.00 to 110.44.
‘(The) AUD slipped from 0.7408 to 0.7369.’
With no major domestic even risk on the horizon, the Westpac analysts see the local currency ‘consolidating a two-week old decline, between 0.7350 and 0.7425’.
The Aussie dollar is also down against the yen and the euro.
CURRENCY SNAPSHOT AT 0635 AEST ON THURSDAY
One Australian dollar buys:
* 73.69 US cents, from 73.99 on Wednesday
* 81.35 Japanese yen, from 81.51 yen
* 63.61 euro cents, from 63.97 euro cents
(*Currency closes taken at 1700 AEST previous local session)