The Australian dollar has jumped after the European Central Bank lowered one of its key interest rates into negative territory for the first time.

At 0700 AEST on Friday, the local currency was trading at 93.41 US cents – the highest level since May 20 – up from 92.82 cents on Thursday.

The ECB said it would lower all three of its key interest rates, which have been on hold at record lows all this year, as part of a set of measures to prevent deflation.

The deposit rate, the rate at which the central bank pays commercial banks for depositing their unused cash, was reduced from zero per cent to minus 0.10 per cent.

The moves caused the US dollar to fall, therefore strengthening the Australian dollar, Bank of New Zealand currency strategist Raiko Shareef said.

But the currency would now have a quiet day ahead of the release of US non-farm payrolls on Friday night, he said.

“It’s going to be very quiet for the Aussie dollar,” he said.

“There’s no local data so everyone is waiting for the US data.”

AAP