Dollar Ends lower as Investors Book Recent Gains

Dollar closed lower today as investors recorded profits after a rally in the currency last week thin trade.

At 5pm AEST, the Australian dollar was trading at 87.20 U.S. cents, down 0,59 percent at the end of Friday's 87.72 cents.

From 7am, the local unit traded between 87.10 U.S. cents and 87.93 cents.

Royal Bank of Scotland currency strategist Greg Gibbs said the dollar closed lower as uncertainty about the Japanese government weakened the sense of danger is the share of Japanese market.

"The fact that some negative reaction towards the end of the day, Europeans are coming," Mr. Gibbs said.

"Again, it is mainly related to equities, this time zone.

"This led to elections in Japan and weak Nikkei».

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Japan's Nikkei-225 index closed down 0,39 per cent today following weekend elections, where the ruling party, the Democratic Party of Japan, lost control of the upper house of national parliament, or Diet.

Investors locked in profits following the local currency's appreciation during the past week, Mr Gibbs said.

Australian unit is rated 3.54 percent since the beginning of the local trade on Monday, July 5.

"In general, the Australian was a good week last week, and perhaps put out a deviation from the market strength in recent weeks," Mr. Gibbs said.

At 5pm AEST, the dollar at 77.46 Japanese yen, down from Friday's end of 77.66 yen and at 69.27 euro cents, up from 68.99 euro cents previously.

Euro finished at 1.2591 U.S. dollars, down the end of Friday's 1.2716 U.S. dollars and at 111.83 yen, down from 112.56 yen.

The U.S. dollar was at 88.82 Japanese yen, up from 88.52 previously.

And the Australian debt market closed slightly firmer in subdued trading before the auction of a large U.S. debt assets.

At 4.30pm, it yields to the CIS Government April 2020 bond was 5,117 percent, down from Friday's end of 5,122 percent, and the May 2013 bond was at 4,530 percent, decreased by 4,553 percent.


Sydney on the future of Exchange, the September 10 year bond future contract was 94,880, down from Friday's end of 94,885, while the September three-year bond future contract was 95,370, up from 95,350.

Westpac senior market strategist Damien McColough said the local bond market traded in a narrow range today after selling off assets for debt last week.

"The market is a bit on knife edge in terms of this week we have had quite a bad week last week, global bonds," Mr McColough said.

Mr. McColough said debt markets were waiting for the auction $ US35 billion ($ A40.13 billion) three-year U.S. Treasuries today offshore session.

Auction is for the first three this week, is generally $ US69 billion (SA79.11 billion).

"It will be difficult to buy bonds before, this week," he said.

At 4.30pm, 90 day bank bill rate is 4.900 percent, where it closed on Friday, and 180 days bank account interest rate is 5.000 percent, where it closed before.

At 1600 AEST, the RBA trade weighted index was 68.4, down from Friday's end of 68.6.