The Australian dollar is lower as hopes fade that China will launch an economic stimulus program to boost growth.
At 0630 AEST on Tuesday, the local unit was trading at 93.27 US cents, down from 93.57 cents on Thursday before the four-day Easter long weekend.
Early on Monday morning, the currency fell as low as 93.15 US cents, its weakest level since April 8, after Chinese Premier Li Keqiang said there would not be any programs to fight short-term dips in economic growth.
Economic data last week showed that China’s annual rate of gross domestic product grew by 7.4 per cent in the first three months of 2014, slightly below the government’s 7.5 per cent target.
BK Asset Management managing director Kathy Lien said the Australian dollar and other commodities currencies weakened after the Chinese premier’s comments.
“Chinese Premier Li said they are not considering strong stimulus now because as long as growth is a little higher or lower than 7.5 per cent, their fiscal and monetary policy stance can be kept unchanged,” she said.
“A large part of the rally in the Australian dollar in March was driven by speculation that China could accelerate stimulus and now that they are saying no, some traders are unwinding those positions.”
And the Australian share market looks set to open higher after Wall Street finished higher as solid earnings reports from Halliburton and others kicked off the busiest week of the quarterly earnings season.
The June share price index futures contract finished the last trading session up 11 points at 5,454.
The US dollar has risen to a two-week high against the yen after Japan posted a record trade deficit in the fiscal year ended in March, though tensions in Ukraine were likely to limit losses on the safe-haven Japanese currency.
The greenback is up seven straight sessions versus the yen, while the euro touched a two-week peak against the Japanese currency.
The dollar index, which measures the greenback against a basket of major currencies, added 0.17 percent to 79.962.