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Dollar eases

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The Australian dollar has fallen to a one-week low after the release of some disappointing US home builder sentiment data and tensions in the Ukraine escalate.

Early Wednesday, the local unit was trading at 93.62 US cents, down from 93.87 cents on Tuesday.

Overnight the currency fell as low as 93.36 US cents, its weakest level since the previous Wednesday.

The US National Association of Home Builders/Wells Fargo Housing Market Index was essentially unchanged in April with most builders still believing the outlook for the housing market is weak.

Meanwhile, Ukraine has sent tanks and special forces to the eastern part of the country to re-assert control in response to attacks from gunmen believed to be Russian.

National Australia Bank senior economist Spiros Papadopoulos said the situation in eastern Europe and the disappointing data encouraged currency traders to sell the Australian dollar and buy safe currencies.

“Ukraine tensions have seen the US dollar and Japanese yen stronger this morning, while the Australian dollar has been one of the worst performers overnight, falling 0.7 per cent against the US dollar,” he said.

“That fall came after a very steady session for the Australian dollar yesterday afternoon, after the Reserve Bank of Australia minutes from the April meeting repeated that the RBA believes the economy is improving and does not need further stimulus.”

Investors are now waiting for the release of Chinese first quarter economic growth data and March retail spending figures, both due out around midday on Wednesday.

Chinese economic growth is expected to be 7.3 per cent in the 12 months to March, down from the 7.7 per cent reading for 2013.

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