$A down on data, ahead of rate meeting

The Australian dollar has fallen slightly on soft international and domestic data.

At 1700 AEDT on Friday, the Australian dollar was trading at 103.99 US cents, down from 104.06 US cents on Thursday.

Since 0700 AEDT, the local currency traded between 103.83 US cents and 104.48 cents.

CMC Markets currency strategist Tim Waterer said weaker data and an upcoming meeting of the Reserve Bank of Australia kept the local currency subdued.

"Recent data hasn't been very supportive of the currency, especially the PPI (producer price index) data today," he said.

"We're also trading a bit weaker ahead of the RBA (interest rates) decision, and we also had some mixed figures regarding Chinese manufacturing, too."

Australian producer prices at the final stage of production rose 0.2 per cent in the December quarter for an annual gain of 1.0 per cent.

This was slightly less than economists' expectations of a 0.3 per cent rise for the month.

Also released on Friday was China's official purchasing managers' index, which fell to 50.4 in January, from 50.6 the month before, but the HSBC PMI for Chinese manufacturing showed a rise to 52.3 in January, from 51.5.

The RBA board is to meet on February 5 and most economists expect it to keep the cash rate on hold at 3.00 per cent.

Mr Waterer said US non-farm payrolls data on Friday night (AEDT) should have an effect on markets.

At 1700 AEDT, the Australian dollar was trading at 95.84 Japanese yen, down from 94.64 yen on Thursday and was at 76.36 euro cents, down from 76.62 euro cents.

Meanwhile, Australian bond futures prices were lower.

At 1630 AEDT on Friday, the March 10-year bond futures contract was trading at 96.500 (implying a yield of 3.500 per cent), down from Thursday's local close of 96.570 (3.430 per cent).

The March three-year bond futures contract was at 97.130 (2.870 per cent), down from 97.190 (2.810 per cent).

Commonwealth Bank head of debt research Adam Donaldson said local movements had partly reflected those in the US, where 10-year bond prices dropped and yields rose from 1.99 per cent to 2.01 per cent during Friday's session.

"We've seen a tone of weakness through most of the day," Mr Donaldson said.

Mr Donaldson said conditions were a thin ahead of the release of US non-farm payrolls figures for January on Friday night AEDT.

"There is obviously a concern that strong data could extend the sell-off in the US and US traders want to stay away from that risk at the moment."

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9292+0.0005+0.06%
    AUDUSD=X
    0.55350.00+0.01%
    AUDGBP=X
    0.6722+0.0001+0.02%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg