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Aussie dollar tracks equities down but remains supported on weaker greenback

Xinhua, February 25, 2016 Adjust font size:

Slides in global equities weakened the Aussie dollar overnight, and however the unit remains resilient due to an also weaker greenback.

At the Asian open on Thursday, the Australian dollar was trading at 72.02 U.S. cents, down from 72.85 U.S. cents at Wednesday's close, reversing gains in Wednesday's local session.

Poor economic data overnight sharply weakened the U.S. dollar, providing support to the local unit amid continued falls in European and U.S. equities. The Australian dollar had traded as low as 71.50 U.S. cents in the session.

The Australia dollar also edged higher in the offshore trade after news officials at the People's Bank of China (PBoC) said the central government could increase China's budget deficit to 4 percent of GDP over a long period to offset falling revenue caused by tax cuts.

"However... the report was written by the head of the PBoC's statistics department rather than the head of the PBoC and does not necessarily signal a big change in government policy," Commonwealth Bank of Australia currency strategist and international economist Joseph Capurso said.

"So the Australian dollar could reverse some of (its) recent gains in Asian trade."

Traders were eyeing the local capital expenditure survey data (CAPEX) released before noon on Thursday, with an expected soft result also weighing on the unit.

At 0955 local time (AEDT), the Australian dollar was trading at 71.89 U.S. cents. Endit