Global sentiment pulls dollar down
The Australian dollar has followed global share markets lower to finish the day down almost one US cent.
In late trade, the currency was buying 103.58 US cents, down from 104.52 cents on Wednesday. On Thursday morning it hit a two-week low of 103.48 US cents.
Ozforex head of corporate dealing Jim Vrondas said the currency moved lower overnight amid weaker US sentiment and continued to fall locally.
‘‘You could classify the day as one of two halves, we saw the decline continue early in morning trade but then we saw the Aussie bounce back closer to 104 (US cents) later in the day,’’ he said.
Global sentiment has turned sharply negative over the past fortnight, partly due to concerns about the so called ‘fiscal cliff’ of tax increases and spending cuts due to come into effect in the US in early 2013.
New York’s Dow Jones Industrial Average dropped 1.45 per cent overnight on Wednesday, while London’s FTSE lost 1.11 per cent and Frankfurt’s DAX30 finished 0.94 per cent lower.
The negative sentiment continued into the local session with the ASX200 down 0.89 per cent.
Mr Vrondas said the key event for the currency overnight would be the release of European gross domestic product (GDP) data for the September quarter.
But he said the currency was likely to move lower and could drop below 103 US cents.
‘‘My view is that we will probably break through that 103.50 (US cents) barrier and possibly test below 103.’’