/www.fxserver.com/ THE Australian dollar closed weaker today as cautious investors left the local currency on the sidelines, waiting for further direction from the US dollar.
At 1700 AEST, the Australian dollar was at $US0.6036/41, from $US0.6061/66 at Friday's close.
Commonwealth Bank currency strategist Alex Schuman said the local currency was in consolidation phase today after last week's "hiatus".
Last week, the Australian currency kept rather quiet as the US dollar found strength on the back of news US forces had taken control of Baghdad.
"This really forced the Australian dollar to test the lows, but having rebounded very strongly from those lows, in the Asian timezone today, there has bene very cautious trading," Mr Schuman said.
The local currency had been quiet during the session, trading between $US0.6029 to 0.6051.
"Investors have been very cautious and waiting for the more liquid markets in London and New York," he said.
Mr Schuman said the Australian dollar was likely to move higher in the short term.
He said the US dollar rally was likely to stall, weighed down by investors shifting positions from bullish to bearish.
The critical level for the local currency was $US0.6050 - a level it failed to break through in trading last week.
"That was the level which everyone thought the Australian dollar would carry on with it, but it failed to do so," Mr Schuman said.