The Australian dollar has pulled back from an overnight high of 77.3 US cents as traders again turn their attention to the timing of an expected US Federal Reserve rate hike.
At 1200 AEST on Friday, the local unit was trading at 76.45 US cents, down from 77.07 cents on Thursday.
OANDA Australia senior currency trader Stephen Innes said the Australian dollar peaked in the wake of well received Chinese trade data on Thursday, but started to wane after the head of the European Central Bank said the bank had not even discussed an extension of its quantitative easing program.
Traders are now focusing on a speech on Monday next week by Lael Brainard, a member of the US Federal Reserve’s board of governors, which will be analysed for any indication of a possible US interest rate hike in September.
“If Brainard comes across with a unified stance on the September Fed lift-off, it could add a lot of credibility to the September rate hike debate,” Mr Innes said.
Traders have been speculating whether the US Federal Reserve will lift interest rates in September or later.
CURRENCY SNAPSHOT AT 1200 AEST ON FRIDAY
One Australian dollar buys:
* 76.45 US cents, from 77.07 cents on Thursday
* 78.09 Japanese yen, from 78.34 yen
* 67.83 euro cents, from 68.46 euro cents
* 103.26 New Zealand cents, from 103.21 NZ cents
* 57.41 British pence, from 57.77 pence
BOND SNAPSHOT AT 1200 AEST ON FRIDAY
* CGS 5.25pct March 2019, 1.5183pct, from 1.473pct on Thursday
* CGS 4.25pct April 2026, 1.9492pct, from 1.861pct
Sydney Futures Exchange prices:
* September 2016 10-year bond futures contract was at 98.033 (implying a yield of 1.967 per cent), down from 98.125 (1.875 per cent) on Thursday.
* September 2016 3-year bond futures contract was at 98.49 (1.51 per cent), down from 98.54 (1.46 per cent).
(*Currency closes taken at 1700 AEST previous local session, bond market closes taken at 1630 AEST previous local session)
Source: IRESS and Online