Dollar falls on Soros talk
The Australian dollar fell in late trade on Monday on the back of market talk that billionaire US investor George Soros had a large short position against the local currency.
The Aussie slipped to a low of $US1.025 against the greenback from $US1.029 as local traders reacted to rumours that Mr Soros - who shorted the British pound in 1992 - was planning a raid on the dollar in the wake of Tuesday's interest rate announcement. The dollar had traded earlier on Monday at above $US1.030.
Pressure on the dollar had also come about after data showed retail sales unexpectedly contracted in March, adding to speculation a weakening economy will prompt the RBA to cut interest rates to a record low.
A large number of trades shorting the dollar totalling $US1 billion were placed via Hong Kong and Singapore late on Monday, believed to be by Soros Fund Management. "Someone has picked a mark around $US1.03 and seems to be betting on a rate cut," one Sydney-based currency trader said on Monday night. "I've heard the George Soros rumour tonight. A billion dollars sounds like a lot, but it's not enough to move the Australian dollar and it's not a lot for George Soros, but there is a play happening in the FX market. If it is him, it's probably a bet on a rate cut. These days a billion bucks can't do much to the Aussie."
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