The Australian dollar is almost half a US cent lower, after following a dip in commodities and a transient fall in US equities overnight.

At 0700 AEDT, the Australian dollar was trading at 97.80 US cents, down from Thursday’s close of 98.23.

Since 1700 on Thursday, the local unit traded between 97.43 US cents and 98.92 cents.

Westpac New Zealand senior market strategist Imre Speizer said it was a mixed night for the Australian dollar.

“Risk appetite for most classes (of investment), including the Aussie dollar, was positive until about 1am Sydney time and that marked a turn around in pretty much everything.

“I couldn’t pin the turnaround on any one news catalyst, but everything turned around at the one time. It was equities, commodities and the US dollar… They all kind of moved together,” Mr Speizer said from Wellington.

“I guess you can say, with the currency, it’s US dollar-led at the moment. You get a big up day and a big down day and there are little catalysts for it.”

Global markets have been looking for hints on whether the US Federal Reserve will take further action to increase the supply of money to stimulate the economy.

“It’s still a US dollar theme and it’s still about what the Fed is going to do on the issue of printing more money,” Mr Speizer said.

“That’s the number one story that’s been kicking around for weeks. It still is; it’s the biggest story. And I think it still is until we get to the (meeting of the US Federal Reserve) in early November.”

He said the key event for the Australian market next week would be the release of the consumer price index on Wednesday.

“That will be a big trigger on whether the RBA increases interest rates,” Mr Speizer said.
He expects the Australian unit to trade between 96.60 and 98.90 US cents today.

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