The Australian dollar is slightly lower as traders wait for a clearer picture on the progress of budget talks in Washington.

At 0700 AEST on Friday, the local unit was trading at 93.65 US cents, down from 93.89 cents on Thursday.

Since 1700 AEST on Thursday, the Australian dollar has traded between 93.40 and 94.03 cents.

LTG GoldRock director Andrew Barnett said the currency was trading in a narrow range this week ahead of what will be a busy period of economic events next week.

“There hasn’t been any reason for traders to buy the Aussie. In the last few days, it’s been about uncertainty in the US,” he said.

“The Aussie dollar has drifted lower as there’s been political uncertainty in the US over that government debt ceiling debate.”

The US Congress and the White House are negotiating to raise the US government’s debt ceiling and reach a short term budget agreement before the fiscal year ends on September 30.

Failure to reach an agreement could force parts of the US government to be shut down.

US Treasury Secretary, Jack Lew, said the debt ceiling would be reached no later than October 17.

Barnett said markets would get a clearer picture on the US budget talks next week.

He also said it’ll be a busier week for economic events, including the Reserve Bank of Australia’s interest rate decision on Tuesday.

“The Aussie has been trading in a narrow range because we haven’t had a big week of economic data,”  Barnett said.

“There hasn’t been anything really to kick these markets into gear.

“I think, next week, this US debt ceiling debate will come to the fore again and give the markets something to grab on to.”

AAP