By Nick Olivari and Cecile Lefort
NEW YORK/SYDNEY, Oct 9 (Reuters) - The Australian dollar's recent surge to near three-month highs versus the U.S. dollar is not expected to last, with traders citing both fundamental and technical reasons for the currency to fall.
The Australian dollar has gained nearly 5 U.S. cents since late August to $0.9445 AUD=D4 on Wednesday and hit a three-month high of $0.9530 mid-September.
Much of the spike came after the U.S. Federal Reserve wrong-footed markets last month by delaying the trimming back of its massive stimulus programme. This sent the U.S. dollar into a tailspin and forced short sellers who had sold the Australian dollar, expecting its price to fall, to buy back the unit.
Traders, however, cite many reasons why the Australian dollar's rally will not continue.
"It's definitely time to rebuild shorts," said a trader at a European bank in Singapore.
The latest Commodity Futures Trading Commission data showed net short positions in the Australian dollar almost halved to 34,819 contracts in the week of Sept 24, from 76,779 in August, the largest amount since at least 1993. IMM.FX
More neutral positioning would only increases the chance of a bigger sell-off should markets turn bearish on the currency.
The Singapore-based trader said the Australian dollar's recent resilience was due to the current stalemate in Washington and concerns over a possible U.S. debt default. Beyond supporting the Australian dollar these factors were also responsible for the U.S. dollar's slump to near eight-month lows against a basket of six currencies .DXY.
"But it's temporary," he said, predicting the Australian dollar would be about 85 cents in 12 months. Likewise, a Reuters poll of 43 analysts forecast the Australian dollar would fall gradually to $0.8800 by this time next year. AUD/POLL
Dealers said the pace of economic growth in China was a key risk factor. The Australian dollar is often used as a liquid proxy for exposure to China -- Australia's top export market.
"Shorting the Aussie is the best way to express China’s rebalancing theme," said Jose Wynne, managing director of research at Barclays Capital Inc in New York.
The Chinese government has an economic growth target of 7.5 percent for 2013, which would be the weakest in more than 20 years. It has repeatedly said it would accept slower growth as it tries to restructure its export-driven economy to one based on consumer demand.
"Slower investment spending should be punitive for growth in China and Australia, renewing pressures on the Aussie," said Barclays' Wynne.
Also weighing on the Australian dollar is the possibility of lower interest rates as the economy adjusts, now that the mining investment boom has past its peak.
The Reserve Bank of Australia (RBA) cut rates in August to a record low of 2.5 percent and financial markets 0#YIB: imply a one-in-three chance of another easing by December, rising to 50-50 by April.
Many analysts think that if the Australian dollar remains above 90 cents against the U.S. dollar, the RBA will cut rates again. Technical analysis of chart patterns also suggests the Australian dollar will fall.
"Traders know that for almost three years the Australian dollar never went below 0.9500," said Joseph Trevisani, chief market strategist at WorldWideMarkets in New Jersey. "They will not have forgotten that level now that the currency is approaching it from beneath."
The Australian dollar has lost 9 percent this year and is the sixth worst-performing unit of the 36 currencies most-actively traded against the U.S. dollar.
(Editing by Eric Meijer)