China casts shadow over US Fed hike and Australian dollar

THE Australian dollar is lower after a top Federal Reserve official said economic havoc in China has cast a shadow over the likelihood of a US rate hike.

Generic photo of an Australian dollar coin .. Aussie one dollar coins, on a twenty dollar note.

THE Australian dollar is lower after a top Federal Reserve official said economic havoc in China has cast a shadow over the likelihood of a US rate hike next month.

At 0630 AEST on Thursday, the currency was trading at 71.10 US cents, down from 71.15 cents on Wednesday.

Overnight William Dudley, head of the New York Federal Reserve Bank and a voting member of the rate-setting Federal Open Market Committee, said China’s slowdown has eroded the argument for raising interest rates in September.

Chinese equities rebounded with around two per cent gains on Wednesday, following eight and seven per cent falls on Monday and Tuesday that rattled global markets.

CURRENCY SNAPSHOT AT 0630 AEST ON THURSDAY

One Australian dollar buys:

* 71.10 US cents, from 71.15 cents on Wednesday

* 85.27 Japanese yen, from 85.01 yen

* 62.80 euro cents, from 61.89 euro cents

(*Currency closes taken at 1700 AEST previous local session)

Source: IRESS