The Australian dollar bounced off its lowest level in more than a week on Tuesday, but weaker Asian stock markets tempered its gains and put a brake on its three-month long rally. The Aussie steadied around $0.7921 in quiet trade, off a low of $0.7828 struck offshore, but still well below an eight-month high of $0.8265 struck on June 3.
It was slightly weaker on the yen at 77.76 yen, from 77.77 seen here late Friday, with falls in most Asian share markets dampening demand for riskier currencies. Although there are no convincing bear signals suggesting the Aussie's uptrend of the last three months is over, some traders said its bull run was not sustainable.
"The Aussie has had a very strong run and I think markets were getting ahead of themselves. I can't see the Aussie heading much higher from here," said David Scutt, a trader at Arab Bank Australia. The Aussie had gained as much as 29 percent at its eight-month peak, and the intersection of the Aussie's 100- and 200-day moving averages on Tuesday for the first time since September suggested the local dollar is no longer oversold.