Australian dollar drops

dollar5The Australian dollar is lower against its US counterpart as markets remain risk averse amid the heightened tension between the US and North Korea.

At 0635 AEST on Friday, the Australian dollar was worth 78.72 US cents, down from 78.80 US cents on Thursday.

The US dollar has eased against a basket of currencies while the geopolitical tensions and benefited safe havens such as gold, US Treasuries and the yen.

Westpac’s Imre Speizer said the US dollar index fell 0.2 per cent on the day, while the defensive yen was the best performer.

The main risk event locally on Friday is Reserve Bank of Australia governor Phillip Lowe testimony before the House of Representatives’ Standing Committee on Economics in Melbourne along with the US consumer price index (CPI) data.

Speizer said the Australian dollar would likely remain in the high 78 US cents area.

“(We’ll see it) stabilising in the high 0.78s. Lowe and US CPI are the main known event risks today.”

The local currency is also against the yen and the euro.

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