Dollar drops as greenback rallies

dollar, down, moneyThe Australian dollar has dropped below US 81 cents after a weak overnight trading session as the US dollar stabilised.

At 0700 AEST on Friday, the local unit was trading at 80.81 US cents, down from 81.27 cents on Thursday.

The Aussie reached a high of 81.63 US cents on Thursday afternoon before easing in overnight trade as the sell off in the greenback moderated.

The US dollar nudged to a fresh four month low during the London morning but later rebounded in New York, Westpac strategist, Imre Speizer, said.

NAB senior currency strategist, Emma Lawson, said selling in China iron ore markets may also have dented the Aussie dollar.

“The Australian dollar continued to rise during the day but ended the 24 hour period lower. News that there was a limit down move in the Dalian iron ore market yesterday may have contributed,” Lawson said.

She said in the absence of important data out of the region on Friday meant the local currency would probably be dictated by the moves in the US dollar.

“There is no expected data in the Southern markets today, so we are left to the vagaries of the US dollar,” she said.

She tipped industrial production data due out in the US on Friday to be upbeat, but said it “might be held back by oil production”.

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