Australian dollar is treading water

THE Australian dollar is treading water ahead of crucial US employment data.

THE Australian dollar is treading water ahead of crucial US employment data.

At 0700 AEDT on Friday, the currency was trading at 71.42 US cents, down from 71.47 cents on Thursday.

BK Asset Management director of FX strategy Boris Schlossberg said Friday night’s US payrolls report is a major risk to the Aussie.

He said most commodity currency trade will hinge on the US data. “If they come in anywhere near expectations you’ll probably see the whole commodity block weaken a little on the assumption that the US will finally come off the zero rates standard,” he said. “Everybody is in a holding pattern until then.” Locally, Australian investors await a key statement from the Reserve Bank on Friday.

ANZ economists say analysts will watch for any changes to inflation forecasts in the RBA’s Statement on Monetary Policy, given the large undershoot in the official third quarter figures. “How this feeds into the bank’s overall outlook for inflation will be a key part of determining the extent of its easing bias and hence the chances of near-term rate cuts,” they said.

Westpac Strategist Imre Speizer said the Aussie remains vulnerable to further downside, with 71.07 US cents the immediate target.

CURRENCY SNAPSHOT AT 0700 AEDT ON FRIDAY

One Australian dollar buys:

* 71.42 US cents, from 71.47 cents on Thursday

* 86.91 Japanese yen, from 86.81 yen

* 65.62 euro cents, from 65.74 euro cents

* 107.90 New Zealand cents, from 108.28 NZ cents

* 46.96 British pence, from 46.46 pence

(*Currency closes taken at 1700 AEDT previous local session)

Source: IRESS