Dollar rebounds against greenback

THE Australian dollar has retraced its previous session’s losses and is again higher against its US counterpart which fell in the offshore session.

The Aussie dollar has peaked, “next stop 78 cents”.

THE Australian dollar has retraced its previous session’s losses and is again higher against its US counterpart which fell in the offshore session on disappointing data.

At 0635 AEST on Friday, the Australian dollar was worth 79.47 US cents, up from 79.28 US cents on Thursday.

The dollar fell after weaker-than-expected US services sector data worried investors ahead of key jobs data and stoked doubts that the Federal Reserve will raise interest rates again in 2017.

The Institute for Supply Management’s non-manufacturing index fell to 53.9 in July from 57.4 in June. While a reading above 50 in the ISM index indicates expansion in the sector, the figure came in below expectations of economists polled by Reuters for a reading of 57.0.

The non-manufacturing employment index fell to 53.6, below economists’ expectations for a rise to 56.5.

BK Asset Management FX Strategy Managing Director Kathy Lien says the US non-farm payroll figures will be important for restoring confidence in the US dollar. Locally, the Reserve Bank of Australia’s monetary policy statement and local retail trade figures would be important for the Aussie, she said.

“Retail sales and the central bank’s monetary policy statement are ... both expected to be negative for the currency,” Ms Lien said in a Friday morning note. “The AUD has peaked and the next stop for the pair should be 78 cents.”

The local currency is slightly higher against the euro but down against the yen.

CURRENCY SNAPSHOT AT 0635 AEST ON FRIDAY

One Australian dollar buys:

* 79.47 US cents, from 79.28 on Thursday

* 87.39 Japanese yen, from 87.69 yen

* 66.93 euro cents, from 66.89 euro cents

Originally published as Dollar rebounds against greenback