News Service from House Harris

Aust dollar closes weaker after quiet local session

SYDNEY, Nov 11 AAP - The Australian dollar has closed lower after it wasdragged down by slumping risk appetite from weak Asian equity markets.

At 1700 AEDT, the Australian dollar was trading atUS0.671518, down 1.3 US cents from yesterday's close ofUS0.684852.

During the day, the unit traded in a tight range betweenUS0.6652 and $US0.6758 in subdued conditions.

The local currency was buoyed by news of aUS576 billion ($A861 billion) Chinese fiscal stimulus package and reachedUS0.6985 during last night's New York session.

But the unit failed to break throughUS0.7000 after a poor finish on Wall Street capped the rally.

And despite slipping 1.9 per cent from yesterday's close, the Australian dollar remained within its recent trading range betweenUS0.6500 and $US0.7000.

HiFx senior consultant Derek Mumford said any moves outside that range - upor down - were not expected in the short term.

"It's right in the middle of that range, I wouldn't read too much from any moves within that range," Mr Mumford said.

"After the huge moves in October, there must be a period of consolidation."

The move lower during the local session was in line with weaker equity markets - the benchmark S&PASX200 index closed down 3.58 per cent, while the broader All Ordinaries index slipped 3.4 per cent.

Mr Mumford said positive sentiment from a planned Chinese fiscal stimulus package quickly waned as investors remained pessimistic about the prospects of the global economy avoiding recession.

"The concern is that despite what China are doing and measures being taken around the world with interest rates and stimulus packages, it still may not be enough to avert a big slowdown in Australia," Mr Mumford said.

"We really don't know where the bottom is going to be and how far interest rates are going to have to fall in Australia.

"It's a bit of a fear of the unknown at the moment."

Mr Mumford said the National Australia Bank monthly business survey, which showed a sharp drop in business confidence in October "didn't help" the Australian dollar.

Trading conditions were expected to be thin overnight due to the Veterans' Day public holiday.

CURRENCY TABLE: Currency snapshot at 1700 AEDT

CURRENCY SPOT PREVIOUS CLOSE

AUDUSD 0.6715-18 0.6848-52

AUDJPY 65.79-85 67.77-84

AUDEUR 0.5266-72 0.5322-30

AUDNZD 1.1448-77 1.1473-86

AUDGBP 0.4280-89 0.4334-40

EURUSD 1.2734-37 1.2856-62

USDJPY 97.96-99 98.98-02

EURJPY 124.75-80 127.28-33

(*Closes taken at 1700 AEDT Previous local session)

At 1600 AEDT, the Reserve Bank of Australia's trade weighted index (TWI) was at 55.7, down from yesterday's close of 56.4.

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