The Australian dollar edged up on Friday, but was wedged in a tight range with gains contained by weaker regional stocks and as investor unease about the outcome of the stress tests on US banks grew. The Aussie had been gaining ground in the past seven weeks amid talk the global economic downturn has bottomed out and growth in China was set to rebound in the second half, helping appetite for riskier assets and commodity currencies.
But most Asian stocks were lower on Friday, and US stock futures fell 0.5 percent, amid growing uncertainty about the global economy and the auto sector in the United States.
"The Aussie is likely to remain rangebound until a clearer picture of the global economic outlook emerges," said John Kyriakopoulos, currency strategist at National Australia Bank.
"GDP in the major economies looks to have plunged again in the March quarter and nervousness about the health of banks persists. With the publication of the results of stress tests on US banks due May 4, investors are understandably nervous." Ahead of those results, US bank regulators will release a report on Friday detailing the assumptions behind their tests.
The Aussie was at $0.7122, up from $0.7083 late here on Thursday, but off a session high of $0.7158. Against the yen, the Aussie pared gains to 69.12 yen from 69.43 yen late here on Thursday. More data from the US later in the session will give a clearer picture about the world's largest economy. Friday's data includes durable goods orders, which halted their slide in February. Analysts expect March numbers to show a 1.5 percent decline.