SYDNEY: The Australian dollar shed some of its recent hefty gains on Tuesday as economically damaging floods provided an excuse for profit-taking, though upbeat global data and strong commodity prices should limit the pullback. The Australian dollar fell to a five-day low of$1.0102 in a thin trading session, down 1.5 percent from a 28-year peak around $1.0257 touched on Friday. The currency lost some of its shine as investors sold the Aussie to lock in profits after a stellar performance last month when it rose 6 percent. The Aussie was also hurt by worries about widespread floods affecting the country's mining areas. [ID:nL3E7C316W] "It's just an excuse used by a lot of traders... to sell," said David Scutt, a trader at Arab Bank Australia. Floods in the state of Queensland, which produces a third of Australia's coal, have severed roads and closed ports, curtailing production of the commodity, the nation's top export. The blow to export volumes and demand will likely be a modest drag on Australia's economic growth in the very short-term, with some economists estimating it could shave perhaps 0.4 percentage point off gross domestic product. While traders say they wouldn't be surprised to see the Aussie retest parity, they don't expect a substantial retreat. " Australia produces a lot of things that the rest of the world needs and that should keep the currency well-supported in the near-term," said Scutt. Immediate support is seen at $1.0090, then $1.0042. Indeed, commodity prices climbed into the new year with copper extending its meteoric run to a new record and the CRB index making a two-year high. The Reserve Bank of Australia said its measure of Australian commodity prices jumped 3.2 percent in December, helped by rising iron ore prices, to be up 48 percent for the year. The Australian currency also gave ground to a firmer euro which edged up to A$1.3204 or up 0.6 percent on the day, having hit a record trough around A$1.2950 last week. The New Zealand dollar ran into profit-taking on recent hefty gains and pulled back to NZ$0.7718 from a peak of NZ$0.7813 on Friday. Trading, though, was very thin on Tuesday as New Zealand financial markets were closed for an extended New Year holiday. The only domestic data showed Australian manufacturing activity slowed for the fourth month in December, with firms blaming a high local dollar and rising interest rates. Australian bond futures gained with both three-year bond contract and 10-year contract up 0.02 points at 94.720 and 94.455 respectively. With U.S. Treasuries hit by the improving data there, the spread between Australian and U.S. 10-year yields narrowed to 217 basis points, well below the peaks of 275 basis points touched in November.

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