Australian dollar rises

dollarThe Australian dollar has crept a little higher against a weakened greenback amid concern that proposed US tax cuts will be significantly delayed.

At 0635 AEDT on Friday, the Australian dollar was worth 76.82 US cents, up from 76.79 US cents on Thursday.

Westpac’s Imre Speizer says concern that US president Donald Trump’s planned corporate tax cuts had prompted the US dollar to slide overnight, along with bond yields and equities, which to some degree had also hurt the local currency.

“The US dollar index is down 0.4 per cent on the day,” he said in a morning note.

“(The) AUD was hurt by the decline in equities, falling from 0.7694 to 0.7650 but partly recovering to 0.7680.”

The main local event risk for the Aussie dollar would be the Reserve Bank of Australia’s Statement on Monetary Policy, to be released on Friday.

“The RBA Statement on Monetary Policy will provide the RBA’s updated forecasts.

“The RBA forecasts will now be a point estimate to the nearest quarter point rather than a range.

“Westpac expects unchanged 2018 and 2019 forecasts (mid-point of range), but 2017 growth to be revised up to 2.75 per cent and inflation down to 1.75 per cent.”

He expects the local currency to remain “stuck in a two-week old range between 0.7625 and 0.7730” on Friday.

The Aussie dollar is lower against the yen and the euro.

AAP

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