The dollar was down more than half a cent against the greenback because of continued fears of weakness in world commodity prices and ahead of local inflation data that might clear space for an interest rate cut next month.
News last weekend that the Group of 20 leading industrialised nations had signalled their support for Japan's policy of expanding its quantitative easing also weighed on the Australian dollar, traders said. At 5pm AEST, the dollar was trading at $US1.0283, down US0.6c.
Traders said the price of gold rose in Asia, but not enough to erase the memory of last week when gold plunged and copper experienced its biggest one-week fall in more than a year. "The stabilisation in gold is helpful but base metals remain fragile," Westpac said in a note to clients.
All attention is now on the release of HSBC's preliminary manufacturing purchasing managers' index for China, due out today. Coming after China last week reported weaker-than-expected economic growth in the first quarter, a slide in manufacturing activity could see the Australian dollar fall further. Westpac said there was a strong risk the dollar would trade below $US1.02 this week, if China showed any signs of a slowdown.
