The Australian dollar is lower after the greenback was boosted by positive US retail sales data that sustained speculation the US Federal Reserve will begin tapering soon.

At 0700 AEST on Wednesday, the local unit was trading at 91.13 US cents, down from 91.38 cents on Tuesday.

The US dollar was higher against all major currencies after the market learned that US retail sales grew for the fourth consecutive month, said BK Asset Management MD Kathy Lien.

Core retail sales, which exclude the volatile car, gas and building supply categories, rose 0.5 per cent in July after a rise of 0.1 per cent in May and 0.2 per cent in June.

Lien said the figures were strong enough to sustain speculation that the Fed will begin tapering its $US85 billion-a-month bond buying program sooner rather than later.

“It is clear that investors believe the data is good enough to keep the hawks talking about reducing purchases over the next two months and that is good for the dollar,” Lien said.

Lien said Tuesday’s weak National Australia Bank July business survey was also weighing the Aussie down.

The survey showed business conditions remain at four-year lows, while low interest rates and the falling Australian dollar have failed to boost confidence, which was at an eight-month low.

“The recent interest rate cut by the Reserve Bank and upside surprises in Chinese data may have eased some concerns but the risk posed by Fed tapering on the global economy is still a worry for Australian businesses,”Lien said.

AAP