The Australian dollar traded a tight range on Friday, retaining yield-related support at 76 US cents, and gained a modest 0.3 percent on the week. The Aussie dollar has been stuck in a $0.7580-$0.7670 range since Monday in the absence of major economic data.
Trading has narrowed towards the bottom of the past month's $0.7563-$0.7715 range as bets on another interest rate rise were trimmed and pushed out to December.
But the Aussie gained ground versus the yen on Friday, firming towards 89 yen, after Japan's softer-than-expected consumer inflation data reduced the chance of a rise in Japanese interest rates any time soon.
Japan's nation-wide consumer price index rose 0.2 percent in July from a year earlier, compared with an expected rise of 0.5 percent, keeping the yen on the back foot against higher-yielding currencies like the Aussie dollar.
"It is going to be very hard for the Bank of Japan to raise rates again this year," said Richard Jerram, analyst at Macquarie Bank. It raised rates in July for the first time in six years.
Still, investors were unwilling to make fresh bets against the yen or the US dollar ahead of a speech from Federal Reserve Chairman Ben Bernanke at 1400 GMT entitled 'The New Economic Geography and Policy Implications'.
By 4 pm (0600 GMT) the Aussie stood at $0.7603/06, down from a peak at $0.7645 offshore on Thursday. Ashley Davies, currency strategist at UBS, said Bernanke's speech had the potential to address global imbalances, an issue of key importance for foreign exchange markets.
Comments
Comments are closed.