The Aussie dollar has slumped against the greenback, which soared as expectations of a US rate hike rose.
At 0700 AEST on Wednesday, the local unit was trading at 73.25 US cents, down from 73.51 cents on Tuesday.
‘The US dollar remained at a multi-week high, supported by strong US data overnight, as well as some hawkish Fedspeak,’ Westpac strategist Imre Speizer said.
US consumer prices recorded their biggest increase in more than three years in April, pointing to a steady inflation build-up that could give the Federal Reserve ammunition to raise interest rates later this year.
The Aussie dollar consolidated gains overnight after outperforming on Tuesday following the release of the Reserve Bank minutes, which were less dovish than expected.
‘The RBA minutes suggested a more restrained tone,’ BK Asset Management’s director of FX strategy Boris Schlossberg said.
‘Although the central bank did note that an appreciating Australian dollar could complicate adjustment.’
The market now expects the RBA to delay further easing until August, he said.
At 7am on Wednesday, 18 May one Aussie dollar was buying:
73.25 US cents, from 73.51 cents on Tuesday*
79.95 Japanese yen, from 80.38 yen
64.74 euro cents, from 64.91 euro cents
107.53 New Zealand cents, from 107.87 NZ cents
50.65 British pence, from 50.70 pence
*Currency closes taken at 1700 AEST previous local session
AAP
