By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) — The U.S. dollar gained against its Australian counterpart in Thursday’s Asian trading, as confidence about Australia’s growth prospects waned.
The Aussie dollar (AUDUSD 0.9967, -0.0026, -0.2602%) was buying 99.78 U.S. cents, down 0.3%, and down 2.5% this week so far.
Some economists have been cutting short-term gross-domestic-product forecasts for Australia following recent flooding in the state of Queensland, which roughly covers an area the size of France and Germany. See related story on impact of Australia flooding.
Australia was one of the strongest performers in the Group of 20 nations last year, “benefiting from near insatiable Chinese demand for its raw products,” said Boris Schlossberg, director of currency research at GFT.
“However, as we enter 2011 China is experiencing double-digit food inflation, forcing its policy makers to tighten monetary policy, which in turn is likely to curtail growth going forward,” Schlossberg said in a note to clients Thursday.
Any downturn in Chinese demand will temper Australian growth, and the “Aussie’s lofty valuation could quickly evaporate as momentum players abandon the currency,” he said.
The dollar index (DXY 80.43, +0.17, +0.22%) , which tracks the U.S. unit against a basket of six currencies, edged up to 80.381 from 80.246 in late Wednesday North American trading.
The euro (EURUSD 1.3100, -0.0050, -0.3803%) slipped to $1.3112 from $1.3153 late Wednesday. See real-time currency quotes and tools.
The British pound (GBPUSD 1.5472, -0.0047, -0.3029%) rose to $1.5505 from $1.5498 late Wednesday.
Against the Japanese currency, the dollar (USDYEN 83.1400, -0.1200, -0.1441%) edged down to 83.13 yen from ¥83.26 late Wednesday.
