The Australian dollar has failed to jump on the US equities rally bandwagon as risk appetite firms, dipping below the 72 US cent mark.
At 0700 AEST, the local unit was trading at 71.97 US cents, down from 72.10 cents on Wednesday.
Wall Street extended gains as oil prices rose and investors became more comfortable with the prospect of a US interest rate rise as early as this northern summer.
BK Asset Management director of FX Strategy Boris Schlossberg said the Australian currency weakened a bit overnight on soft local construction data amid quiet trade.
A disappointingly large drop in construction work in the March quarter is expected to weigh on growth.
He said the Aussie/Kiwi cross continued to drift towards the 106.00 cents mark.
“New Zealand continues to outperform Australia on the trade front as demand for its soft commodities such as milk and wheat remains much firmer than the demand for Australia’s iron ore goods,” he said.
With some analysts forecasting that the Reserve Bank will eventually lower its benchmark interest rate to one per cent, the prospect of Aussie/Kiwi parity remains a very real possibility into the year-end, Schlossberg said.
