Soft oil pushes Aussie dollar lower again

Aussie dollar

The Aussie dollar rose to a high of 75.28 US cents in overnight trade before slipping back to just over 74.5

The Aussie dollar is continuing to slide as oil prices sink.

At 0700 AEDT on Wednesday, the local unit was trading at 74.54 US cents, down from 74.89 US cents on Tuesday.

The Aussie dollar rose to a high of 75.28 US cents in overnight trade.

Westpac economists say the lower brent crude prices, down 1.8%, pushed commodity currencies lower for a second straight day.

Concern over Iran’s plans to double production and rising US stockpiles weighed on oil prices overnight.

‘Lower oil prices again appeared to lead equities and commodity currencies lower,’ the Westpac economists said in a note.

‘This (the dollar’s) corrective pullback targets the 7400 (US cent) area today, (with) weaker global commodities helping the move.’

The were no market-moving local risk events due for the Aussie dollar on Wednesday.

However, the economists said US inflation data and the Federal Reserve’s decision on interest rates were both due on Wednesday night (AEDT).

Westpac economists said interest rates were unlikely to change, but markets would be looking for a ‘modestly hawkish tone’ from the US central bank.

At 7am AEDT on Wednesday, 16 March one Aussie dollar was buying:

74.54 US cents, from 74.89 cents on Tuesday*

84.32 Japanese yen, from 84.91 yen

67.12 euro cents, from 67.43 euro cents

112.82 New Zealand cents, from 112.53 NZ cents

52.69 British pence, from 52.50 pence

*Currency closes taken at 1700 AEDT previous local session

AAP