Aussie dollar weakens before recovering overnight

The Australian dollar weakened against the pound yesterday, retracing some of its previous weeks' gains. The aussie was hit by a decline in equity markets and heightened risk aversion, due largely to the US government’s rejection of plans for further funding for two of the world’s largest car makers. However, the aussie dollar recovered the lost ground overnight, helped by marginally better sentiment and speculation that the Reserve Bank of Australia may hold rates steady at next week's policy meeting.