The Australian dollar fell today as the return to global risk aversion continued to affect the local currency.
At the local close, the currency was trading at $US0.8853, down from Tuesday’s close of $US.8874.
During the local session better than expected construction data prompted economists to say a strong gross domestic product (GDP) figure next week could be expected.
Construction work done in the June quarter was 3.5 per cent higher than in the March quarter in seasonally adjusted and inflation adjusted terms, the Australian Bureau of Statistics (ABS) said.
HiFX senior consultant Derek Mumford said the Australian dollar reacted well to the construction figures.
‘‘It’s bouncing around in quite a tight range, we’ve seen a bit of profit-taking this morning, we’ve seen some good numbers from construction done,’’ Mr Mumford said. ‘‘The most recent quarter was above expectations and the revision from the previous quarter was good as well and a lot of that was in residential property."
Data due on Wednesday night offshore includes US durable goods orders and US new home sales. The market is keenly awaiting US GDP figures on Friday night.
Mr Mumford said concern about the global economy would weigh down currency markets in the short term.
‘‘The general mood in equities market is pretty negative at the moment and I think that will override any numbers at the moment.
‘‘We could see some consolidation, but I’m not looking out for a big move overnight but we could see it another 30 to 40 points lower and maybe see overnight dip below 88 US cents.
‘‘I’m not expecting any great capitulation at this stage but certainly the trend is negative,’’ he said.
AAP