Aussie dollar drops sharply on poor construction data

Aussie dollar

The Aussie dollar was hit by data released Thursday that showed construction activity contracted for a fourth consecutive month and hit a 13-month low in March.

The Aussie dollar has slipped on the back of concerns over the declining construction sector.

At 0700 AEST on Friday, the local unit was trading at 75.05 US cents, down from 76.15 cents on Thursday.

The Aussie dollar slipped to 74.92 US cents in overnight trade.

BK Asset Management director of FX strategy Kathy Lien says the Aussie dollar was hit by data released Thursday that showed construction activity contracted for a fourth consecutive month and hit a 13-month low in March.

She said the weak figures had raised market concerns that the Reserve Bank of Australia could further ease monetary policy.

‘Next to the Yen, the Australian dollar experienced the greatest weakness, ignoring the uptick in gold,’ she said in a note.

‘A deeper contraction in construction sector activity and the Australian dollar’s strength is raising concerns about further RBA easing.

Ms Lien said RBA said the currency’s appreciation could complicate the country’s adjustment from a mining to a non-mining economy.

‘On a fundamental and technical basis, there are signs of a stop in the Australian dollar,’ she added.

At 7am on Friday, 08 April one Aussie dollar was buying:

75.05 US cents, from 76.15 cents on Thursday*

81.20 Japanese yen, from 82.87 yen

65.96 euro cents, from 66.53 euro cents

110.74 New Zealand cents, from 111.20 NZ cents

53.39 British pence, from 53.95 pence

*Currency closes taken at 1700 AEST previous local session

AAP