Dollar below parity with US greenback

Wall Street is falling back from record highs overnight as retail markets pose a slight gain. Commsec report

Australian Money Source: Supplied

THE Australian dollar is holding below parity with the US greenback following better-than-expected American retail sales data.

At 7am AEST today, the local currency was at 99.53 US cents, almost half a US cent below yesterday's close of 100 US cents.

Today, the local currency started the trading session below parity with the US unit for the first time in 11 months, as a 0.1 per cent rise in American retail sales for April buoyed the greenback.

Bank of New Zealand currency strategist Mike Jones said the unexpected result, which beat forecasts of a 0.3 per cent drop, dealt a blow to the Australian dollar.

"The Aussie stands out as the weakest link on currency markets overnight," he said. "Generally speaking, it's been relatively quiet but Aussie dollar weakness has been eye-catching."

"It's more a US story than an Aussie-specific story."

The fall also follows a 9.3 per cent rise in Chinese industrial output for April, which was below the 9.5 per cent level expected by economists.

Mr Jones said the Australian dollar was likely to stay below parity with the US greenback today, ahead of the federal budget.

"Today's session probably is going to be all about consolidation for the Aussie dollar."

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