Aussie dollar recovers amid weakening greenback in offshore trade

A slightly weakening greenback in offshore trade has enabled the Australian dollar to regain ground lost from comments from a senior Australian central banker that he would be comfortable with the unit trading around 65 U.S. cents.

At the Asian open on Monday, the Australian dollar was trading at 71.50 U.S. cents, up from 71.12 U.S. cents at Friday's close.

In an interview late Friday, Reserve Bank of Australia board member John Edwards said he would be more comfortable with the Australian dollar to trade around 65 U.S. cents, but added he wasn't confident the downward trend would continue, sending the unit lower.

"It does look like it (the Australian dollar) has found a base, and I guess I would say I still think it is a bit too high," Edwards told the Wall Street Journal.

"If it was driven entirely by commodity prices, it certainly should be lower."

Despite the U.S. dollar initially spiking to a nine-day high on Friday's offshore trade in response to accelerate inflation data, money markets were still not convinced the U.S. Federal Reserve would raise rates again this year, explaining the reversal to a four day low, supporting the Aussie, Commonwealth Bank of Australia senior currency strategist Elias Haddad said Monday.

Despite the gains, the uncertain global economic growth backdrop and shaky financial market conditions will continue to remain weighing factors on the local unit, which will also be guided by Australia's Q4 wages index, released on Wednesday and the capital expenditure (CAPEX) survey on Thursday.

"However, decent economic data ... should see it outperform other commodity currencies, barring a further meltdown in global sentiment," Westpac currency strategist Imre Speizer said.

At 1014 local time (AEDT), the Australian dollar was trading at 71.43 U.S. cents. Endit