The Australian dollar fell over a cent on Monday, dragged down by weaker stock markets, a stronger US dollar and lacklustre commodity prices. The Aussie fell to $0.8026, down over a cent from $0.8153 seen here late Friday. It tumbled in the last hour of local trade, hindered by a firmer US dollar, which posted its sharpest one-day gain in a week on Monday.
The stronger US dollar hit metal prices as well, further weighing down on the Aussie as Australia is a big exporter of commodities such as iron ore. "The Aussie is consolidating as the US dollar rebounds from last week's sell-off," said Philip Burke, a currency dealer at J.P. Morgan. Aussie also dropped on the yen to 79.02, from Friday's 79.93.
Lower Asian stock markets and US stock futures markets also dampened the mood on the Aussie, which had hit 8-month highs earlier this month. The local dollar tends to track equity markets because they are seen as a barometer of risk appetite.
Burke said some investors were selling the Aussie to take profits from its recent rally, although others were taking advantage of pull-backs in the Aussie to buy the currency. Overall, he said investors still expected the Aussie to grind higher in coming weeks, but perhaps not at the same pace which had seen in it zoom up 26 percent since the start of March.
Data from trade positions of currency speculators also seemed to suggest investors were turning more cautious. Long positions on the Aussie were trimmed by 2.7 percent to 40,966, latest data from the Commodity Futures Trading Commission showed.
But a 4 percent drop in short positions boosted overall net positions on the Aussie to 31,883 in the week ending June 9, from 30,744 the week before. "It's hard to see the Aussie trading much above $0.83 unless the global economic recovery is strong and at this stage it's too early to judge with any certainty," National Australian Bank said in a note to clients.
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