THE Australian dollar has fallen slightly following weak domestic and international data. Late on Friday, the dollar was trading at US103.99¢, down from US104.06¢ on Thursday.
The CMC Markets strategist Tim Waterer said weaker data and the coming meeting of the Reserve Bank kept the currency subdued.
"Recent data hasn't been very supportive of the currency, especially the PPI [producer price index] data," he said. "We're also trading a bit weaker ahead of the RBA decision, and we had some mixed figures regarding Chinese manufacturing."
The RBA board is to meet on February 5 and most economists expect it to keep the cash rate on hold at 3 per cent.
Producer prices rose 0.2 per cent in the December quarter for an annual gain of 1 per cent. This was slightly less than economists' expectations of a 0.3 per cent rise for the month.
China's purchasing managers' index was also released on Friday. It fell to 50.4 last month, from 50.6, but the HSBC index for Chinese manufacturing showed a rise to 52.3 last month, from 51.5.
Bond futures prices were lower, following the lead from a weakening US treasury market.
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 contract was at 97.130 (2.870 per cent), down from 97.190 (2.810 per cent).
The head of debt research at Commonwealth Bank, Adam Donaldson, said local movements had partly reflected those in the US, where 10-year bond prices dropped and yields jumped 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," he said.
"There was some brief respite when positive Chinese PMI [producer manufacturing index] data came out earlier in the day and futures rallied back for a little while then, but they haven't been able to hold that tone overall," Mr Donaldson said.
He said trading was subdued before the release of US non-farm payrolls figures for January on Friday night.