Dollar dips

dollarThe dollar is lower after Greece rejected the initial offer in its bailout negotiations with European officials.

At 0700 AEDT on Tuesday, the local unit was trading at 77.72 US cents, down from 77.84 cents on Monday.

Greece said the opening European bailout offer was “absurd” and “unacceptable”, after it had been told to respect the existing conditions of the bailout.

Westpac, senior market strategist, Imre Speizer said sentiment turned negative after the talks’ breakdown. “Sentiment soured overnight as Greece and Eurogroup officials could not agree on the shape of the bailout extension,” he said.

“Greek officials are claiming the proposals tabled at the meeting represent a step back from last week’s joint statement agreed to by Prime Minister Alexis Tsipras and Eurogroup President Jeroen Dijsselbloem.”

The price of iron ore rose 3.3 per cent on expectations of Chinese restocking after the Lunar New Year holiday, which would have given the Australian dollar some support.

The minutes of the Reserve Bank of Australia’s February board meeting, being released today, will likely have more guidance on why the RBA cut the cash rate at that meeting, and whether another reduction can be expected in March.

“The slightly risk averse tone overnight could push the Australian dollar lower to 77.25 US cents, and the RBA minutes are an additional risk,” Speizer said.

AAP

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