$A down on US concerns

The Australian dollar is slightly lower on concerns the United States' budget problems will not be resolved before the year's end.

At 0700 AEDT on Friday, the currency was trading at 104.88 US cents, down from 104.91 cents on Thursday afternoon.

Bank of New Zealand currency strategist Mike Jones said the overnight market focus was all on the US, and its unresolved talks to avert the so-called fiscal cliff.

"I think the fiscal cliff is the main thing influencing the market overnight," he said.

"It has managed to keep risk appetite low, and weaken the Aussie dollar.

"However, weighed up against that is some stronger data from the US - they had a very strong reading for the Philadelphia Fed index overnight."

The so-called Philly Fed index - which measures manufacturing activity on the US east coast - increased to 8.1 in December, from -10.7 the month before.

"That data lifted some of the gloom around the fiscal cliff, and left the Aussie trading almost sideways," Mr Jones said.

US leaders are working to reach a resolution to avert the fiscal cliff - a series of tax hikes and spending cuts due to begin in 2013.

On Friday, the country's House of Representatives will vote on a budget `Plan B' proposed by Republican speaker John Boehner - but president Barack Obama is likely to veto the plan.

Mr Jones said a lack of local economic data, plus low volumes in the market, would mean the Aussie dollar was unlikely to move much throughout Friday.

A

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9295+0.0008+0.09%
    AUDUSD=X
    0.5537+0.0002+0.04%
    AUDGBP=X
    0.6724+0.0003+0.04%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg