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SYDNEY, Jan 29 AAP

January 29 2013, 06:50AM

The Australian dollar has fallen to its lowest level in almost a month amid an improved outlook for European economies.

It has since rebounded to be 104.09 US cents at 0630 AEDT on Tuesday, but is still down from 104.49 US cents on Friday, before the Australia Day long weekend.

Overnight, the currency fell to 103.85 cents - its lowest level since January 1.

BK Asset Management managing director Boris Schlossberg said investors were moving away from the Australian dollar and towards the euro amid hopes an economic recovery was underway there.

He said a weaker outlook for the Australian economy, with the mining investment boom believed to be near its peak, was also hurting the currency.

"Although stock prices have performed well in January, the Aussie (dollar) has lagged badly as investors re-assess the country's prospects amidst lower capital expenditures on new mining projects and its still high exchange rates which weigh on Australia's competitiveness," he said.