Australian dollar softer in late trade

Positive Chinese economic data fails to recover weakness sparked by the Reserve Bank.

The Australian dollar is slightly weaker as gains on the release of positive Chinese economic data failed to recover weakness sparked by the Reserve Bank.

At 1700 AEST on Wednesday, the currency was trading at 75.65 US cents, down from 75.87 cents on Tuesday.

The latest survey on China service sector activity provided fresh evidence of a nascent economic recovery, with activity strengthening in March.

Commonwealth Bank currency strategist Joseph Capurso said the local currency rose after the release of the Chinese data.

“The increase we saw in the Sydney trading session came after the China PMI came out,” Mr Capurso said.

But the local currency was lower than levels recorded before the Reserve Bank left the cash rate unchanged on Tuesday.

In a statement accompanying the decision, governor Glenn Stevens warned the surging currency could threaten the non-mining economy’s recovery.

At 1700 AEST, the Australian dollar was at 83.53 Japanese yen, down from 83.72 yen on Tuesday, and at 66.62 euro cents, down from 66.69 euro cents.

Bonds were a touch firmer as investors worry about global growth.

At 1630 AEST on Wednesday, the June 2016 10-year bond futures contract was trading at 97.570 (implying a yield of 2.430 per cent), up from 97.550 (2.450 per cent) on Tuesday.

The June 2016 three-year bond futures contract was at 98.170 (1.830 per cent), up from 98.150 (1.850 per cent).

AAP