The Australian dollar is lower on the back of strong consumer confidence and home sales figures in the US.
Early on Wednesday, the local currency was trading at 93.69 US cents, down from 94.08 cents on Tuesday.
Figures released in the US overnight showed that consumer confidence increased for the second straight month in June to its highest level since January 2008, when the US economy was sinking into recession.
Sales of new homes in the US in May hit their highest pace since the market crashed six years ago.
The encouraging figures boosted the greenback, dragging the Australian dollar lower, said BK Asset Management managing director Kathy Lien.
“The US dollar traded higher against most of the major currencies today on the back of stronger economic data,” Lien said.
Positive economic news would be required to push the Aussie dollar higher again, she said.
“The Australian dollar and New Zealand dollar have been trading near their year-to-date highs and in order for either currency to set a new milestone, unambiguously positive news is needed, otherwise they are vulnerable to profit taking,” Lien said.
On Wall Street US stocks dropped despite the solid economic data in a decline analysts attributed to profit taking and the ongoing Sunni insurgent attacks in Iraq.
The Dow Jones Industrial Average tumbled 119.13 points (0.70 per cent) to 16,818.13, while the broad-based S&P 500 fell 12.63 (0.64 per cent) to 1,949.98.
Both indices had notched record closing highs last week.
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The tech-rich Nasdaq Composite Index lost 18.32 (0.42 per cent) at 4,350.36.
Michael James, managing director of equity trading at Wedbush Securities, attributed an afternoon swoon in equity markets to ongoing newsflow out of Iraq.
“People are using (Iraq) as an excuse to take some profits given how extended the market’s been,” James said. “Selling has kind of brought out more selling.”
On Tuesday, Iraqi air strikes killed at least 38 people as security forces held off attacks on a strategic town and an oil refinery, officials said.
