Dollar falls further after retail data

THE Australian dollar has fallen after the release of weaker than expected retail sales data.

dollar

THE Australian dollar has fallen after the release of weaker than expected retail sales data.

At 12.00 AEST on Thursday, the currency was trading at 101.88 US cents, down from 102.04 US cents on Wednesday.

The dollar had been higher than Wednesday's level before the release of official data showing retail spending grew by only 0.2 per cent in August, compared to economists' expectations of a 0.4 per cent rise.

St George economist Janu Chan said the dollar reacted to the weaker numbers as they suggest the Reserve Bank of Australia (RBA) could cut the cash rate again.

The RBA cut the cash rate by 25 basis points on Tuesday.

"The run of data between now and the next RBA meeting is quite important, it's signalling the possibility of a November rate cut," Ms Chan said.

"There are also a lot of uncertainties in the global economy which could push the dollar down further."

Meanwhile, bond prices were lower at noon.

The December 10-year bond futures contract was trading at 97.145 (implying a yield of 2.855 per cent), down from 97.180 (2.820 per cent).

The December three-year bond futures contract was at 97.710 (2.290 per cent), down from 97.730 (2.270 per cent).

Mr Speizer said that with little positive sentiment, the Australian dollar could continue to fall in the short-term.

"The key number to watch for is 101.65 (US cents)," he said.

"If that gave way, we could start moving towards parity."