The Australian dollar is lower against its US counterpart as investors shy away from global commodity currencies, spooked by suggestions the United States may withdraw from the North American Free Trade Agreement (NAFTA).

At 0635 AEST on Thursday, the Australian dollar was worth 74.69 US cents, down from 74.95 US cents on Wednesday.

Westpac’s Imre Speizer said commodity currencies – such as the Aussie dollar – were rattled by reports the US may withdraw from NAFTA.

“(The) AUD initially extended losses to 0.7455 – a four-month low – before bouncing to 0.7483 in NY,” he said in a note on Thursday morning.

The local currency subsequently has dropped again, and is also down against the yen and the euro.

Meanwhile “the US dollar index initially gained 0.6 per cent but shed around half of that following the US tax reform announcement”, Speizer said.

AAP

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