Reserve 'jawboning' hits local dollar

The Australian dollar is at a near three-month low amid "jawboning" from the Reserve Bank governor and expectations that the US Federal Reserve will soon begin tapering its stimulus program.

Late on Friday, the Australian dollar was trading at US91.79¢, its lowest since September 6, down from US93.04¢ on Thursday.

The local currency lost almost 1¢ on Thursday after minutes revealed the Fed expected to taper its economic stimulus program "in coming months". The Aussie dollar continued to fall on Friday following a speech from Reserve governor Glenn Stevens reiterating the bank's view that the currency remains "uncomfortably high".

"The Aussie has fallen more than a cent since [the speech]," Westpac currency strategist Sean Callow said. "The RBA really started its very tangible increase in jawboning, seemingly to talk down the Aussie, on October 29 when Glenn Stevens delivered a speech that made many references to the Aussie being too high. That kicked off the jawboning from US95.75 cents at the time. This has been the third day of 'pick on the Aussie' - it's actually the weakest currency of the world over the past week."

Meanwhile, bond futures recovered some ground after falling on the back of the Fed stimulus talk. Futures prices were given a boost on Friday following disappointing figures from the Philadelphia Federal Reserve manufacturing index.

It was a quiet day for the bond market, CMC Markets' Michael McCarthy said. "We've had a settling of the view that regardless of whether tapering starts in December or April, it's coming."

The December 10-year bond futures contract was trading at 95.730 (implying a yield of 4.270 per cent), up from 95.715 (4.285 per cent) on Thursday. The three-year contract was at 96.840 (3.160 per cent), up from 96.820 (3.180 per cent).