The Australian dollar is lower as solid US economic growth figures raised expectations the Federal Reserve will scale back its asset purchases in the coming months.
At 0700 AEST on Friday, Australia’s currency was trading at 89.31 US cents, down from 89.58 cents on Thursday.
US gross domestic product (GDP) growth in the 12 months to June was 2.5 per cent, better than the original estimate of 1.7 per cent, the Commerce Department said.
Most major currencies fell against the US dollar as investors believed the data may mean a tapering of the Fed’s economic stimulus program.
OM Financial senior client adviser Stuart Ive said the GDP figures and worries about a possible missile attack as punishment for Syria using chemical weapons on its own citizens weighed on the Australian dollar.
“The US GDP came out stronger than expected, so everyone is looking at the US tapering in whatever form that comes,” he said.
“The market will be expecting the tapering to start sooner rather than later.
“The other reason is there is is still uncertainty with that will happen with Syria.”
Of interest to the market will be the release of Japanese inflation figures for August, due out at 0930 AEST on Friday.
Ive expects the Australian dollar will trade in a range between 88.90 and 89.60 US cents on Friday.
AAP
