The Australian dollar is lower against the strengthened greenback after a neutral speech by US Federal Reserve chair Janet Yellen surprised the market.

At 0700 AEST on Monday, the local currency was trading at 93.10 US cents, down from 93.25 cents on Friday.

The Australian dollar strengthened ahead of Friday night’s Jackson Hole economic summit in the US, amid expectations that Yellen would deliver a downbeat assessment of the US economy, said BK Asset Management MD Kathy Lien.

But her speech was neutral, with no new information, which boosted the greenback.

“Investors were hoping she would verify that the central bank is moving closer to changing the language in the Federal Open Market Committee statement and could be even considering an earlier rate rise,” Lien said.

“Unfortunately she did none of that and in fact provided zero clarity on the direction of monetary policy, which perhaps could be the main reason why the US dollar strengthened after her comments.

“Yellen confirmed that asset purchases will end in October and indicated that if the faster progress was made on their goals, it could bring an earlier rate rise.

“This line would have been extremely positive for the greenback had she not added in almost the same breath that if slower progress was made, they could delay a rate rise.”

AAP