The Australian dollar is lower following a fall in precious metal prices and mixed economic data showing the US is growing at a moderate pace.
At 0700 AEST on Friday, the local unit was trading at 92.76 US cents, down from 93.17 cents on Thursday.
In overseas trade, gold futures dipped below $US1,200 a troy ounce amid continued worries about a possible coming end to the US central bank’s stimulus program following the release of a batch of US economic data. It later closed down $US18.2, or 1.5 per cent, at $US1,211.6.
The data released on Thursday night, Australian time, showed US incomes were higher, pending home sales were strong, inflation pressures remained low and consumer spending rebounded – although not as high as expected.
OM Financial senior client adviser Stuart Ive said the selloff of precious metals, along with the strong US economic data, would have weighed on the Australian dollar.
He said the local currency was going through a consolidation period following the upheaval caused last week when US Federal Reserve chairman Ben Bernanke indicated a possible winding-back of the central bank’s stimulus program, which saw the local unit fall against a surging US dollar.
A string of Fed speakers had since sought to reassure markets, telling them they over-reacted to Dr Bernanke’s announcement, Mr Ive said.
“It’s been a fairly hectic week with everyone trying to gather their thoughts on what the Fed are actually saying and where the US economy is relative to the Australian economy,” Mr Ive said.
“The consolidation that the Fed has sought, they’ve achieved that now in slowing down this freefall that we saw in all global markets, which was partly to do with the Fed and partly to do with concerns about China.
“Now, we’ll be looking for fundamental economic data to really direct where we are going to go to next.”
Mr Ive said the local currency would likely trade within a narrow range on Friday, with little data to drive investor sentiment.