The Australian dollar has briefly dropped below 74 US cents after Federal Reserve Chair Janet Yellen flagged a rate rise is on the horizon.
At 1200 AEDT on Friday, the local unit was trading at 74.03 US cents, down from 74.79 cents on Thursday. It hit a low of 73.9 US cents at 1135 AEDT.
Ms Yellen said the Fed could raise its interest rate "relatively soon" due to further improvement in the US job market and a pick-up in inflation.
That has boosted market expectations of a rate hike in December.
Stephen Innes, senior currency trader at FX and CFD provider OANDA Australia and Asia Pacific, said the Aussie has been under pressure all week because of the steeper US yield curve and softer outlook for commodity prices.
"Yesterday's underwhelming domestic employment data was the driver for traders to stick the fork in the pair," Mr Innes said.
CURRENCY SNAPSHOT AT 1200 AEDT ON FRIDAY
One Australian dollar buys:
* 74.03 US cents, from 74.79 cents on Thursday
* 81.51 Japanese yen, from 81.63 yen
* 69.74 euro cents, from 69.9 euro cents
* 59.63 British pence, from 60.19 British pence
* 105.25 New Zealand cents, from 105.35 NZ cents
BOND SNAPSHOT:
* CGS 5.25 per cent March 2019 at 1.803pct, up from 1.758 pct on Thursday
* CGS 4.25pct April 2026, 2.609pct, up from 2.518pct on Thursday
Sydney Futures Exchange prices:
* December 2016 10-year bond futures contract at 97.365 (indicating a yield of 2.635 per cent), down from 97.465 (2.535 per cent) on Thursday,
* December 2016 3-year bond futures contract at 98.16 (1.84 per cent), down from 98.22 (1.78 per cent).
(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)
Source: IRESS
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