Dollar hits six week low

The Australian dollar is lower as its US counterpart rallies amid concern about the weak global economic growth.

At 0700 AEST on Monday, the local unit was trading at 102.79 US cents, up from 103.43 cents on Friday. Early on Monday morning, the currency dropped to 102.59 US cents, its lowest level since March 11.

Bank of New Zealand currency strategist Mike Jones said the Australian dollar lost ground during the offshore session on Friday as the greenback rallied against the Japanese yen.

“That stronger US dollar was the catalyst for the sell-off in the Aussie late in the Friday session,” Jones said from Wellington.

“There is that cloud of uncertainty and negativity lingering over markets as we’re seeing some signs that global growth is dropping back a little bit.

“So the Aussie dollar is back around where it was in the middle of last week.”

Jones said currency markets would watch for the release of Chinese manufacturing survey for April from HSBC, due out on Tuesday afternoon.

“As we saw from the Chinese data last week, the Chinese economic rebound is a little disappointing,” he said.

“That increases the importance of tomorrow’s data.”

Jones said he expects the Australian dollar to trade in a tight rate between 102.60 and 102.95 US cents on Monday.

AAP

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