Dollar struggles after China equities fall

THE Australian dollar is down as Wall Street suffers following further losses on Chinese stock markets.

THE Australian dollar is down as Wall Street suffers following further losses on Chinese stock markets. At 0700 AEDT on Thursday, the local unit was trading at 69.61 US cents, down from 70.26 cents on Wednesday.

US equities were down early on Thursday (AEDT) following a 2.4 per cent drop in the Shanghai Composite on Wednesday.

OM Financial senior client adviser Stuart Ive said markets were relatively stable overnight, despite some weaker-than-expected US oil inventories.

“That added pressure onto energy stocks and it’s now spread throughout, with consumer stocks now leading the charge on the downside for the Dow Jones,” he said.

“The Aussie had been unchanged against the greenback overnight but in the last two hours it’s come off.” Mr Ive said risk aversion was now kicking in to some markets with beleaguered oil prices falling again.

Local jobs figures for December, due for release on Thursday, will also be a key risk event for the currency, he said.

“We’ve had two months of very large unexpected upside moves in the Aussie employment data,” Mr Ive said.

“We may see a correction to the downside which will add further pressure this afternoon.” Investor focus will then turn to the opening of the Shanghai stock market where officials are trying to stabilise volatility.

CURRENCY SNAPSHOT AT 0700 AEDT ON THURSDAY

One Australian dollar buys:

* 69.61 US cents, from 70.26 cents on Wednesday

* 82.00 Japanese yen, from 83.11 yen

* 63.99 euro cents, from 64.87 euro cents

* 106.59 New Zealand cents, from 106.96 NZ cents

* 48.19 British pence, from 48.59 pence

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

Source: IRESS