The Australian dollar has slipped back below 90 US cents following stronger-than-expected US retail data and hawkish comments from US Federal Reserve officials.
At 1200 AEDT on Wednesday, the Australian dollar was trading at 89.64 US cents, down from 90.38 cents on Tuesday.
US Commerce Department figures show that retail sales in December were up 0.2 per cent from November, while the November reading was downwardly revised to 0.4 per cent from 0.7 per cent.
The data, along with hawkish comments from US Federal Reserve officials Charles Plosser and Richard Fisher about the tapering of quantitative easing (QE), drove the Australian dollar lower, ANZ head of global markets Richard Yetsenga said.
Plosser said he favoured ending QE by late 2014, while Fisher again said he favoured a $US20 billion-a-month initial tapering of the Fed’s monthly $US85 billion bond-buying program. The Fed in December it would reduce its monthly bond purchases by $US10 billion a month, starting in January.
“The Aussie has really been a victim of global factors rather than domestic ones over the last 24 hours,” Mr Yetsenga said.
“There was the retail data and there was a couple of Fed speakers continuing to talk about a reasonably robust economic recovery.
“The US dollar was stronger, US rates were higher, the market seems to be already discounting last Friday’s weak US non-farm payrolls result.”
Australian bond futures prices were also lower.
At 1200 AEDT on Wednesday, the March 2014 10-year bond futures contract was trading at 95.810 (implying a yield of 4.190 per cent), down from 95.855 (4.145 per cent) on Tuesday.
The March 2014 three-year bond futures contract was at 96.960 (3.040 per cent), down from 97.000 (3.000 per cent).