The Australian dollar slipped from one-week highs on Wednesday, giving up some of the hefty gains made in the previous two sessions, as renewed concerns about a global recession hurt appetite for high-yielding currencies. Those concerns drove commodities and regional stocks lower, prompting investors to unwind leveraged carry trades.
The Aussie eased against the yen, dropping to 70.77 yen from 72.63 yen late here on Tuesday. The Aussie dipped to $0.6978 from $0.7105 against the US dollar, having risen to a one-week high of $0.7239 in offshore trade.
The Australian dollar had gained more than 9 percent from a 5-1/2 year low of $0.6330 struck late last week, drawing support from moves by governments and central banks across the world to rescue battered banks and shore up investor confidence.
"The global economy is still heading into recession, commodity prices are down, the Australian central bank is set to cut rates further and there is still a good deal of uncertainty over the details of how official support schemes will work," said Tony Morriss, senior currency strategist at ANZ.