The Australian dollar retreated from one-week highs against the US currency and Japanese yen on Thursday as lingering worries about a global slowdown and weaker domestic data than expected prompted investors to pare holdings.
Although a recovery in risk appetite lifted Asian stocks, demand for carry trades, where investors borrow in the cheaper yen to buy higher-yielding currencies and riskier assets, took a breather. "The Aussie had a choppy session with a pretty challenging outlook for growth a negative," said Anthony Morriss, senior currency strategist at ANZ.
The Aussie has been on shaky ground in recent sessions amid growing risk aversion and expectations that a possible slowdown in global growth could dent demand for commodities. The Aussie had eased to $0.8826/30 from a one-week high of $0.8921 struck in offshore trade, but remained above the $0.8756/60 late here on Wednesday.
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