The Australian dollar has risen Friday, buying 67.90 US cents from 67.81 US cents on Thursday.
One Australian dollar buys 74.06 Japanese yen, from 74.24; 61.91 euro cents, from 62.00; 54.76 British pence, from 54.92; and 108.08 NZ cents, from 108.00.
On Wednesday, the local currency rose from recent lows against the greenback, though trading was light ahead of key economic data in both countries and an expected US interest rate cut.
The Australian dollar was off 0.18 per cent at 68.51 US cents on Wednesday, slightly higher than a seven-day low of 68.30 US cents touched in the previous session.
Investors are focused on Australia’s August employment data due on Thursday, which is likely to show the jobless rate rose to 5.3 per cent from 5.2 per cent in July, much higher than the central bank’s goal of 4.5 per cent.
A higher number would bolster the case for a rate cut as soon as October.
The central bank has adopted an easing bias after recently slashing rates to record lows of 1.0 per cent.
The RBA has shown openness to move again if needed, signals that have put downward pressure on the dollar.
Investor attention will also be on a rate decision by the US Federal Reserve, which is all but certain to ease policy to 1.75 per cent to 2.0 per cent to help offset some of the impact from the country’s ongoing trade war with China.
Markets will focus on any indications about future policy, especially after Fed chair Jerome Powell had described the last cut in July as a “mid-cycle adjustment.”
Some analysts believe it may be the last rate cut for a while unless there is more evidence of a US economic slowdown.
“A 25 bps cut is well priced in, so in the absence of any surprise in the rate move investors will be looking at the message in the statement and subsequent press conference,” said Nick Twidale, co-founder of Sydney-based trade finance provider X-chainge.
“The risk probably sits once again with a hawkish cut and if this comes to fruition, then expect stock markets to take a hit along with risk trades overall.”
Overnight, the dollar was also weighed down by a fall in oil prices and a stronger euro.
Australian government bond futures were little changed, with the three-year bond contract flat at 99.175.
The 10-year contract was off 1.5 ticks at 98.855.