Aussie dollar falls to six-month low

THE Australian dollar has fallen to a fresh six-month low on further negative sentiment about possible developments in the euro zone.

THE Australian dollar has fallen to a fresh six-month low on further negative sentiment about possible developments in the euro zone.

At 1700 AEST on Thursday, the local currency was trading at 97.73 US cents, almost unchanged from 97.74 cents on Wednesday.

Overnight, it fell as low as 96.93 cents - its lowest point since November.

The local currenecy then traded in a tight range as a lack of new developments from Europe kept traders mostly sidelined.

Commonwealth Bank currency strategist Joseph Capurso said the local currency had very little information to move it.

"It's had a really tight trading range today, with a low point of 97.25 US cents, and a high of 97.71 cents," he said.

"It looks like the market can't make up its mind where to go next."

Mr Capurso said Chinese manufacturing data - in the form of the HSBC flash purchasing managers' index (PMI) - had little effect on the market.

"It has moved the market in recent months, but was totally ignored today," he said.

"We don't think it's as reliable as the official PMI and don't take it as seriously, and it appears the market is starting to ignore it as well."

The PMI reading was 48.7 in May, down slightly from 49.3 in April.

European data and commentary due on Thursday would be closely watched, Mr Capurso said.

"I think the Aussie could have a downside risk from its current position, because there will probably be some bad news coming out of Europe," he said.

"UK GDP (gross domestic product) is due out, and we think that might be revised down.

"There will be a couple of ECB (European Central Bank) speeches as well, and European PMIs."