$A propped up by European rate cut
Late on Friday, the local unit was trading at US102.54¢, up from 102.36¢ on Thursday.
The Australian dollar strengthened early on Friday after the ECB's decision to cut its refinancing rate to a record low of 0.5 per cent and stronger US unemployment and trade data, which helped boost equity markets.
However, traders said the currency's rally has slowed as traders await the release of non-farm payrolls - the US employment measure - for last month.
Anticipation of the Reserve Bank board meeting on Tuesday would have also capped the rally in commodity currencies, traders added.
The RBA is widely expected to keep the cash rate at a near record low of 3 per cent, but most economists believe there will be a cut some time this year.
On Friday afternoon, the Aussie fell to an almost 3-year low against the New Zealand dollar.
It dropped to 120.31 New Zealand cents, its lowest level against the trans-Tasman neighbour since December 2009.
The NZ dollar has had a recent surge as the nation's government bonds prove popular with investors because of their above 3 per cent yield, which is relatively high compared with other nations.
Late on Friday, the Australian dollar was at 100.51 Japanese yen, up from Thursday's close of 99.57 yen, and at 78.26 euro cents, down from 78.83 euro cents.
Meanwhile, Australian bond futures prices were almost level.
UBS interest rate strategist Matthew Johnson said it had been a very quiet local session for the bond market, with little news to drive price movements.
"It's gone completely sideways all day, which is kind of normal pre-payrolls," he said.
"There is basically nothing going on, People are waiting for payrolls tonight."
Mr Johnson said better US jobless claims numbers pushed bond futures prices lower in offshore trade on Thursday night.
Frequently Asked Questions about this Article…
The ECB cut its refinancing rate to a record low 0.5%, which helped lift equity markets and gave the Australian dollar an early boost. Late on Friday the AUD was trading at US102.54¢, up from US102.36¢ the previous day, though the currency's rally later slowed as traders awaited key US data.
Non‑farm payrolls are a major US employment measure that can move global markets. The article says the AUD's rally slowed because traders were waiting for last month’s payrolls release — a sign markets expected the report to influence risk sentiment, currency flows and bond prices.
The RBA is widely expected to keep the cash rate at a near‑record low of 3% at its upcoming meeting, though most economists mentioned in the article believe a rate cut is likely sometime later this year.
The AUD fell to 120.31 New Zealand cents — its weakest level against the NZD since December 2009. The NZD’s recent surge was linked to strong demand for New Zealand government bonds, which were yielding above 3% and attractive to investors.
Late on Friday the Australian dollar was at 100.51 Japanese yen, up from Thursday’s 99.57 yen, and at 78.26 euro cents, down from 78.83 euro cents.
Australian bond futures were described as almost level, indicating little local movement. UBS strategist Matthew Johnson said the session was quiet and largely sideways ahead of payrolls. Offshore moves — for example, better US jobless claims — had pushed bond futures lower in overseas trading, showing how international data can affect local yields.
UBS interest rate strategist Matthew Johnson commented that the local bond market had been very quiet and gone sideways, which he described as normal before the US payrolls release. He noted there was basically nothing going on as people waited for that data.
Based on the article, watch upcoming US non‑farm payrolls and other US employment data, the RBA board meeting on the cash rate, and developments in New Zealand government bond yields. These events can influence currency moves, equity sentiment and bond futures.
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