Dollar lower ahead of Chinese GDP figures

THE Australian dollar has pulled back a bit after dropping to its lowest level in two weeks overnight.

THE Australian dollar has pulled back a bit after dropping to its lowest level in two weeks overnight ahead of the release of key Chinese economic data.

At 07.00 AEST on Friday, the Australian dollar was trading at 101.39 US cents, down from 101.64 US cents on Thursday.

Overnight, the currency fell to 101.01 US cents, its lowest level since June 29.

HiFX senior trader Stuart Ive said the Australian dollar was weighed down by the weak performance of stock markets overnight and continuing negative sentiment about weaker domestic employment figures.

Data released by the Australian Bureau of Statistics on Thursday show total employment fell by 27,000 in June while the unemployment rate rose to 5.2 per cent, from 5.1 per cent in May.

Stock markets in the US and Europe lost ground during the overnight session with London's FTSE 100 falling 0.99 per cent and New York's S&P 500 dropping 0.51 per cent.

Mr Ive said the Australian dollar was likely to continue to trade lower ahead of the release of Chinese gross domestic product (GDP) data around noon (AEST) on Friday.

Economists expect the data to show the world's second largest economy to have grown by about 7.9 per cent in the past 12 months.

"If it comes in lower than that, it's going to add to the downward pressure today," he said.