Fears on Chinese slowdown push dollar down

THE Australian dollar has fallen on fresh fears that China's economy could slow down at a faster pace than anticipated.

THE Australian dollar has fallen on fresh fears that China's economy could slow down at a faster pace than anticipated.

At 7.01am AEDT today, the Australian dollar was trading at 104.80 US cents, down from 105.77 cents yesterday afternoon.

Westpac New Zealand senior market strategist Imre Speizer said the market expected a slowdown to occur, but fresh news from Chinese data and global mining companies pointed to a faster pace of cooling than previously suggested.

"There have been a number of news pieces on China in the last 24 hours," he said.

"We had the mining companies - notably BHP Billiton - saying they are seeing less demand from China, and that Chinese steel production is down.

"We also saw Chinese cars statistics yesterday reporting that they're unlikely to meet their car sales forecasts for the year, and then the lift in fuel prices as well."

Mr Speizer said he expected this sentiment to hold in the short term, but that the Australian dollar would pick up again towards the end of the week.

"I'm expecting the low we saw last Thursday of 104.23 (US cents) to hold, and at this stage I'm seeing this one-day decline as a correction," he said.

"Once that correction finishes, I would expect the rally to resume, and we will punch above our earlier high of 106.37 (US cents) later this week."