The Australian dollar edged lower on Thursday as its US counterpart strengthened ahead of this week's jobs data, which could bolster expectations of a Federal Reserve rate hike this year. The Australian dollar slipped 0.1 percent to $0.7610. It looked set to end the week down after two straight weekly gains as investor attention veers to the Fed, the European Central Bank and the Bank of Japan.
Australia did report a smaller-than-expected trade deficit for August, but that was overshadowed by the looming US nonfarm payrolls report on Friday which is expected to show 175,000 jobs were added last month. That will be on top of upbeat services sector activity in the world's biggest economy that rebounded to an 11-month high in September.
The market is currently pricing in a 20 percent chance of a Fed rate hike by November although a strong employment report could see the odds tightening.
The Aussie is still faring well against other currencies. It is on track for its fourth straight day of gains against its New Zealand cousin, up 0.2 percent. Against the yen, it held near a one-month peak hit on Wednesday, while it stood near its highest in more than three years against the pound. The New Zealand dollar weakened 0.2 percent to 0.7164, sticking to a tight range.
The Kiwi dollar's technical chart indicators suggest sell signals across the board, said OM Financial Ltd Private Client Advisor Stuart Ive. New Zealand government bonds eased, sending yields 2 basis point higher at the short end. Australian government bond futures fell too, with the three-year bond contract down 2 ticks at 98.42. The 10-year contract edged 2.5 ticks lower to 97.885.
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