Dollar loses six cents in six weeks
Late on Friday, the dollar was trading at US91.02¢, down from US91.23¢ on Thursday.
The currency has fallen steadily over the past six weeks, losing US6¢ since October 25.
Recent interventionist comments by the Reserve Bank have also kept a lid on the currency.
St George trader Janu Chan said a weak performance on Asian markets on Friday and a blocked bid for GrainCorp had kept the dollar under pressure.
"It's a combination of those factors and then there's the ongoing uncertainty of quantitative easing in the US and when that will start to unwind," Ms Chan said.
A business group has questioned the surprise decision that ended Archer Daniels Midland's $3.4 billion offer for Australia's largest grains handler, GrainGorp, saying it risks undermining the government's own statement that "Australia is open for business".
Traders expect some volatility in the dollar next week because of the large amount of economic data coming out locally and in the US.
The highlights of next week's local economic diary are the Reserve Bank's interest rate decision on Tuesday and Wednesday's release of September quarter national accounts, which includes gross domestic product data.
The bond market firmed slightly in low volumes, despite a higher inflation reading in Germany.
NAB head of research Peter Jolly said trading was light on Friday due to the Thanksgiving Day public holiday in the US.
He said the combined influences of higher European yields, a stronger sharemarket and a slightly higher CPI reading in Germany had kept Australian bonds relatively stable.
The December 10-year bond futures contract was trading at 95.835 (implying a yield of 4.165 per cent), up from 95.800 (4.200 per cent) on Thursday. The three-year contract was at 96.92 (3.08 per cent), up from 96.880 (3.120 per cent).
Frequently Asked Questions about this Article…
The Australian dollar has been falling due to the strengthening of the US dollar, driven by expectations that the US Federal Reserve will reduce economic stimulus measures. Additionally, interventionist comments by the Reserve Bank and weak performance in Asian markets have contributed to the decline.
The Australian dollar has fallen by six US cents over the past six weeks, trading at US91.02¢ late on Friday, down from US91.23¢ on Thursday.
The blocked bid for GrainCorp added pressure to the Australian dollar, as it contributed to market uncertainty and was seen as a factor in the currency's recent decline.
Traders are expecting some volatility in the Australian dollar next week due to the release of significant economic data both locally and in the US, including the Reserve Bank's interest rate decision and the September quarter national accounts.
The bond market firmed slightly in low volumes despite a higher inflation reading in Germany. Influences such as higher European yields and a stronger sharemarket helped keep Australian bonds relatively stable.
Trading was light on Friday due to the Thanksgiving Day public holiday in the US, which contributed to reduced market activity.
Key economic events to watch for next week include the Reserve Bank's interest rate decision on Tuesday and the release of the September quarter national accounts on Wednesday, which will include gross domestic product data.
Higher European yields, a stronger sharemarket, and a slightly higher CPI reading in Germany have helped keep Australian bonds relatively stable despite other market pressures.
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