Aussie dollar pulls back


dollar symbolsThe Australian dollar is slightly lower amid more signs that the US economic recovery may not be all that strong.

At 0700 AEST on Wednesday, the local unit was trading at 93.91 US cents, down from 94.13 cents on Tuesday.

Overnight, data showed that the US consumer confidence index declined to 79.7, the weakest since May.

The data added to uncertainty about when the US Federal Reserve will start to taper its economic stimulus program.

The Fed surprised the market last week when it said it would keep the program going in full.

LTG GoldRock director Andrew Barnett said the Australian dollar was still inclined to drift lower after the US Federal Reserve’s no taper decision last week.

“We’ve seen this sharp sentiment towards everyone thinking the US is recovering a lot quicker than it realistically is,” he said.

“That consumer confidence number was weaker than the market expected.”

Mr Barnett said speculation on the Federal Reserve’s further decisions will dominate markets for the rest of the week mainly because there are many speeches to come from Fed committee members.

“It’s not a big week for economic data, so the market in the US is transfixing on these Federal Reserve speeches,” he said.

“So, the Aussie is just pulling back based on that.

“We’re really waiting on some economic data to tell us if the Aussie will drift back towards 90 US cents or whether we’re going to drift back higher to 95 US cents.”


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