Australian dollar weakens as risk appetite falls

The Australian dollar weakened against sterling on Friday, as concerns over the timing of a recovery in the world economy saw investors become more risk averse.

• Recent optimism had driven the high-yielding aussie to multi-year highs against sterling.
  
• However, doubts over an imminent recovery in the global economy started to reverse much of those gains towards the end of last week.
  
• Stock markets fell across Asia overnight despite encouraging Consumer Confidence data from Japan, as uncertainty about a recovery in the world economy kept investors from buying riskier assets.
  
• Focus is likely to remain on economic data this week, with major inflation and retail sales data due out of the UK, while both the Bank of England and the Reserve Bank of Australia release minutes from their last meeting later this week.