Australian dollar drifts lower on greenback strength

THE Australian dollar has reversed Tuesday’s gains in the face of US dollar strength.

Australian money - one dollar coins, cash generic Australian currency.

THE Australian dollar has reversed Tuesday’s gains in the face of US dollar strength.

At 0700 AEDT on Wednesday, the local currency was trading at 87.80 US cents, down from 88.18 cents on Tuesday.

The Australian dollar bounced above 88 US cents on Tuesday following the release of positive Chinese economic data but the moves were reversed overnight as the greenback strengthened.

Reports suggesting bond buying by the European Central Bank, as well as better-than-expected US housing data, boosted the US dollar, National Australia Bank global co-head of FX strategy Ray Attrill said.

“Having risen to just above 88.25 US cents last night, the Australian dollar currently sits back down near 87.75 cents,” Mr Attrill said.

All eyes on Wednesday will be focused on the release of local inflation figures from the Australian Bureau of Statistics.

The consumer price index (CPI), the key measure of inflation, is forecast to have risen by 0.4 per cent in the three months to September, according to an AAP survey of 13 economists.

Originally published as Australian dollar drifts lower on greenback strength