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Aussie dollar takes a breather after frenzied rally

Monday June 1, 2009, 10:11 am


SYDNEY, June 1 (Reuters) - The Australian dollar edged back from eight-month highs on Monday, as the market took a breather from its best monthly gain since 1982.

* By 10:00 a.m. (0000 GMT), the Aussie AUD=D4 was at $0.7998, up from $0.7921 late on Friday, but off a eight-month high of $0.8075. The local dollar has surged more than 20 percent in the last two months.

* A raft of local economic data later in the day will provide the Aussie direction. April retail sales figures are due at 11:30 a.m. (0130 GMT) and analysts expect a 0.5 percent rise after sales recorded a solid 2.2 percent gain in March.

* Also due are first-quarter business inventories and company gross profits data. These form part of the building blocks for first-quarter gross domestic product data due on Wednesday. [ID:nSYD484019]

* Data on Monday showed Australian manufacturing activity contracted at a slower pace in May [nSYD426168]. Both China and India will release purchasing managers' index (PMI) data on Monday and are expected to support hopes that a global recovery is underway.

* The Aussie slipped to 76.27/34 from 76.59/62 yen AUDJPY=R late here on Friday, but was not far from a recent 8-month high of 76.90 yen. The Aussie has been buoyant against the yen on rising risk appetite and growing inflows from Japanese investors who are increasingly starting to purchase overseas assets.

* Aussie bond futures fell as prospects of an economic recovery dimmed appetite for safe-haven government bonds. Worries about ballooning government debt worldwide also weighed on sentiment.

* Three-year bond futures YTTc1 were down 0.02 points at 96.110, while ten-year futures YTCc1 rose 0.04 points to 94.79. (Reporting by Anirban Nag; editing by Wayne Cole)