THE Australian dollar slipped yesterday as commodity prices fell, although a strong report on the national labour market limited the decline.
Sentiment towards Europe's debt crisis has improved in recent days, but a pick-up in the Australian dollar flamed out in the session yesterday.
For the dollar, the biggest hit was a sell-off in copper, considered a proxy for growth expectations, as it slid more than 2 per cent just a day after slumping to 13-month lows on global demand concerns. At 5pm AEST, the dollar was trading at US97.95c, down US0.92c from Wednesday's close.
Protecting the local unit from a bigger drop, a late morning report showed Australian job vacancies rose 3.2 per cent in the quarter ending in August, with private sector job vacancies up 4 per cent in the three months to August. After the unemployment rate ticked higher in each of the past two months, the report had some traders forecasting that a big move higher may not be coming.
Even with the rebound that helped the Australian dollar recover from a morning low of US97.02, Christopher Gore, a currency trader with Go Markets in Melbourne, forecast more falls in coming days.
"We still think the Aussie is on a downward trajectory with so much more to go through in Europe. The Aussie is on its way to at least US95c," he said.
Westpac strategists in Singapore and New York were even more downbeat in their assessment, noting interest rate differentials, Australian commodity prices and global risk sentiment had their fair-value point for the dollar at US85c.
Their estimate had been below the current price for "some time", but the strategists expected further slippage..
