Australian dollar closes lower

The dollar finished lower today, but showed some resilience to stay above 105 U.S. cents amid jitters over the European sovereign debt and weaker-than-expected foreign trade data.

At 5pm (AEST), the dollar was at 105.39 U.S. cents, down from yesterday's close of 105.71 U.S. cents.

During the day, the local unit moved the between a low of 104.97 U.S. cents and a high of 105.57 cents U.S., According to Iress data.

The latest outbreak of concern over the capacity of European countries, Such as Greece, Portugal, Spain and Ireland, to service the debt Their offshore markets dominated During the overnight session and sent stocks tumbling.

There were the resource persons Further negatives During the local trading day, Pls the latest balance of payments report showed net exports would detract a bigger-than-forecast 0.5 percentage points from growth in the June quarter.

And the local stock market lost about 1.5 per cent.

In the afternoon, the Reserve Bank of Australia's (RBA) said it Had decided to keep the cash rate unchanged at 4.75 per cent, where it's been since November 2010.

RBA governor Glenn Stevens said the near-term growth outlook was somewhat weaker than was expected A Few months ago, but "beyond the near term, growth is still Likely to be at a trend or higher, Unless the World Economic Outlook Continues to deteriorate."

Macquarie Group senior economist Brian Redican said the statement suggested there were the resource persons "Certainly no signs They are considering cutting rates", with the board instead Appearing to aim of adopting a wait-and-see approach until economic events played out overseas.

"But rate hikes in the near term seem to have fallen off the agenda," Mr Redican said.

Despite the downbeat news, Rochford Capital senior consultant Derek Mumford said the Australian dollar held up surprisingly well to Remain above 105 U.S. cents.

Mr Mumford said the prospect of Further Interest Rate Rises Kept track down the buyers interested in the Australian dollar, particularly at or close to 105 U.S. cents.

"The pressure is still very much on the downside, but as we've seen in the past there does not seem to be a lot of interest to buy the Aussie at anything around 105 U.S. cents," Mr. Mumford said.

"It is not a reserve currency, but what are your alternatives to buy? The Aussie has got the highest rates in the developed market and They look like They are going to stay at this level and Potentially go higher.

"The other choices do not look like a great alternative."

There is more domestic economics news to come on Wednesday, with the Australian Bureau of Statistics due to publish the June quarter gross domestic product data.

Also, Mr. Stevens is scheduled to deliver a speech at a business breakfast in Perth.

U.S. markets reopen tonight (AEST) after yesterday's Labor Day public holiday, where a weak start on Wall Street is expected given the STEEP falls on European bourses.

The RBA's trade weighted index (TWI) was at 75.7, down from 76.0yesterday.

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