THE Australian dollar is lower, trading on thin volumes, as investors remain cautious about the US budget negotiations.
THE Australian dollar is lower, trading on thin volumes, as investors remain cautious about the US budget negotiations.
At 07:00 AEDT, the local unit was at $US1.0371, down from $US1.0409 on Christmas Eve on Monday.
BK Asset Management director Kathy Lien said with most traders off work the movement in US stocks was the main driver for the Australian dollar.
"As a result currencies are taking their cue from equities, so at the start of the North American session we had the Aussie dollar run up a bit as stocks opened up in positive territory in the US," Ms Lien said from New York.
"Then we had a sharp sell-off in the New York session, as a result the Aussie dollar reversed."
Ms Lien said there was still nervousness in the markets ahead of the Chinese November industrial profits to be released today and US budget negotiations set to resume tonight.
"At this point it looks like there will only be a minimal deal," Ms Lien said. "The lack of big price action in the market indicates investors are quite nervous."