SYDNEY - The Australian dollar closed weaker on Wednesday after an increase in risk aversion during offshore trading pushed the currency to its first losing finish in 10 local trading sessions.
At 1700 AEDT, the Australian dollar was trading at US$0.6966/69, down from Tuesday's close of US$0.7072/76.
During the day,
the unit moved between a low of US$0.6942 and a high of US$0.6995.
The Australian dollar had risen from US$0.6382/86 on March 10 to US$0.7072/76 at the close of the March 24 local session, representing an appreciation of 10.8 per cent.
But the rally ended during offshore trade, as fading enthusiasm for the US government's latest plan to remove so-called toxic assets from bank balance sheets caused a negative finish on Wall Street and dragged the unit back below US$0.7000.
RBC Capital Markets senior currency strategist Sue Trinh said it was "worrying" that US equities were unable to extend their gains on the back of a massive rally the previous night.
"The initial euphoria post the US government's most recent bank rescue plan that was announced the night before, seems to be fading," Ms Trinh said.
"So there's a little bit of risk aversion creeping back into the market.
"It certainly looks like another false dawn could be upon us, which is not going to be too favourable for the likes of the Aussie dollar."
The majority of the Australian dollar's move came in offshore trading, with the currency stuck in a 50 basis point range during the local trading day.
Ms Trinh said some investors had taken advantage of the Australian dollar's recent move to book profits.
"We've come a long way very fast and typically these moves don't go on without consolidation," Ms Trinh said.
Reserve Bank of Australia (RBA) governor Glenn Stevens was scheduled to present the Ian Little Memorial Lecture in Melbourne on Wednesday night, with his speech entitled "Public policy and the payments system" due at 1830 AEDT.
Ms Trinh said the market would closely watch the German business climate indicator, or IFO survey, for March due at 2000 AEDT.
"That's tended to be quite a good directional driver of the euro and by extension the US dollar," Ms Trinh.
Data out in the US overnight included new home sales for February, as well as US durable goods orders for the same month.
Currency table
CURRENCY SPOT PREVIOUS CLOSE
AUD/USD 0.6966-69 0.7072-76
AUD/JPY 67.91-96 69.50-54
AUD/EUR 0.5167-74 0.5173-80
AUD/NZD 1.2449-60 1.2360-74
AUD/GBP 0.4744-52 0.4802-10
EUR/USD 1.3475-77 1.3665-68
USD/JPY 97.50-52 98.27-29
EUR/JPY 131.38-41 134.28-32
- AAP
SYDNEY - The Australian dollar closed weaker on Wednesday after an increase in risk aversion during offshore trading pushed the currency to its first losing finish in 10 local trading sessions.
At 1700 AEDT, the Australian dollar was trading at US$0.6966/69, down from Tuesday's close of US$0.7072/76.
During the day,
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