$A lower as fiscal cliff nears
Market watch top headlines
SYDNEY, Dec 24 AAP
December 24 2012, 5:10PM
The Australian dollar has closed lower as the prospect of an agreement to avert scheduled spending cuts and tax increases in the United States becomes less likely.
At 1700 AEDT on Monday, the local currency was trading at 104.09 US cents, down from 104.53 cents on Friday afternoon.
Since 0700 AEDT, the Australian dollar has traded between 103.85 US cents and 104.10 cents.
Easy Forex currency dealer Tony Darvall said trading volumes were light ahead of Christmas Day, but the Australian dollar had continued to weaken.
"We've fallen quite a bit, but it is quiet because it's Christmas Eve," he said.
"We could see more selling though if the market gets any more negative news, or it looks like politicians aren't going to make any progress on the fiscal cliff.
"They only have a few more days until the end of the year."
On Friday, US politicians failed to reach an agreement on a plan to increase taxes for those earning more than $US1 million.
Talks were continuing to come up with measures to avoid the so-called fiscal cliff - a series of tax hikes and spending cuts which will begin from January 1.
At 1700 AEDT, the Australian dollar was at 87.80 Japanese yen, down from Friday's local close of 87.82 yen. It was at 78.96 euro cents, from 79.18 previously.
The local currency market will be closed for Christmas and Boxing Day public holiday and was due to reopen Thursday.
Meanwhile, the Australian bond market closed a shortened pre-Christmas session weaker in quiet trade.
At the 1230 AEDT close, the March 10-year bond futures contract was at 96.680 (implying a yield of 3.320 per cent), up from 96.695 (3.005 per cent) at Friday's close.
The March three-year bond futures contract was trading at 97.270 (2.730 per cent), down from 97.280 on Friday.
RBC Capital Markets fixed income strategist Michael Turner said there was little activity on the market ahead of the Christmas break.
"I don't know how many trades have been done but I would suggest not many," Mr Turner said.
Local debt futures markets will be closed on Christmas Day and Boxing Day before reopening on Thursday.
The Reserve Bank of Australia's (RBA) trade weighted index was at 77.1 points, down from 77.3 points on Friday.