The Australian dollar was over one US cent lower this morning after the central bank kept the cash rates on hold on Tuesday and the release of weak US economic data overnight.
At 0700 (AEST), the Australian dollar was trading at 107.80 US cents, down from 108.90 cents yesterday.
The Australian dollar has fallen steadily since the Reserve Bank of Australia (RBA) announced it kept the interest rate at 4.75 per cent on Tuesday afternoon.
RBA governor Glenn Stevens, in a short statement with the decision, said that while the June quarter inflation figures were high, it should stay in the two to three per cent target range for the rest of the year.
HiFX senior dealer Dan Bell said investors were moving out of high-risk, high-yield assets and moving in to safe haven assets.
"The Aussie dollar was weaker following that statement and weaker overnight following further risk aversion," Mr Bell said from Auckland.
"We also had the RBA yesterday with a statement, which was not as concerned about inflation as expected."
Data released overnight showed US consumer spending dropped 0.2 per cent in June, the first decline since September 2009.
"Uncertainty about the global outlook continues to weigh on investor sentiment," Mr Bell said.
"The weaker consumer spending in the United States weighed on growth expectations of the US economy and that follows weaker manufacturing data earlier this week and weaker GDP (gross domestic product) number last week.
"So you've got more analysts revising down their growth expectations for the US economy and their outlook for US equities."
The focus for the Australian market on Wednesday is the release of June retail sales figures and international trade data.
"Retail sales are going to be important because of the recent weakness," Mr Bell said.
