The Australian dollar lost almost two US cents today after falling victim to nervous investor sentiment on local and offshore markets.
At the end of local trade, the dollar was buying $US0.8359, down from Wednesday’s close of $US0.8553.
ICAP economist Adam Carr said the unit was under pressure for most of the trading day as the sharemarket moved deeper into the red.
‘‘It started off pretty badly,’’ he said.
The local sharemarket started the day in the red following a poor lead from the US and closed at its lowest level in 11 months.
Mr Carr said the only respite for the domestic unit came with press reports of a possible deal between the miners and the federal government.
BusinessDay reported a deal had been struck between the government and the big three miners - BHP Billiton, Rio Tinto and Xstrata - over the terms of the proposed 40 per cent resource rent tax.
‘‘The market reacted to that,’’ Mr Carr said. ‘‘The Aussie jumped about 40 pips on the news.’’
The unit quickly shed the gains with little follow-up news on the deal,’’ he said.
During the offshore session, the US Institute for Supply Management is expected to publish its manufacturing index for June. The median market forecast is for the index at 59 points, down from 59.7 in May but still above the 50 level that separates expansion from contraction.
The US Census Bureau is expected overnight to publish its construction spending data for May.
The forecast is for construction spending to have fallen by 0.6 per cent in the month, following a rise of 2.7 per cent in April.
‘‘Unless the ISM has a big figure, the market won’t react to it,’’ Mr Carr said.
Reuters