The rebounding greenback has snapped an eight-day rally of the Australian dollar.
At 0700 AEST, the local unit was trading at 74.31 US cents, down from 74.70 cents on Thursday.
BK Asset Management managing director of FX strategy Kathy Lien said the greenback has been falling since investors adjusted their expectations for a US Federal Reserve rate hike.
However, she said the dollar has rebounded partly due to an official US report showing initial claims for state unemployment benefits declined by 4,000 to 264,000 in last week, beating economists’ expectations of a rise to 270,000.
“Currency traders have been yearning for a turn – and that’s exactly what we saw today, US stocks eased off year-to-date highs and the dollar rebounded against most of the major currencies,” Lien said in a note.
“The smaller-than-expected increase in US jobless claims helped but it has been a while since this report had any meaningful impact on the greenback.
“So the question now is whether today’s reversals will turn into a top for high beta currencies and a bottom for the dollar.”
There no local risk events due for the Aussie dollar on Friday.
