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Dollar drops on positive US economic data

dollar, US, moneyThe Australian dollar is lower following better than expected US economic data as traders look ahead to next week’s Reserve Bank of Australia board meeting.

At 0700 AEST on Friday, the local currency was trading at 79.06 US cents, down from 79.68 cents on Thursday.

ANZ senior manager FX, Sam Tuck, said positive economic news out of the US had weighed on the Australian currency.

“We saw the first positive April regional Fed survey with the Chicago purchasing manager’s survey exceeding expectations,” he said.

“More importantly the signs on employment in the US are still pretty decent.”

The US Labor Department reported overnight that weekly claims for unemployment insurance benefits plunged to their lowest level since April 2000.

Tuck said investors were now looking at whether the Reserve Bank would cut the official cash rate on Tuesday.

“Having got through the FOMC event … the markets abruptly switched and said ‘now let’s focus on the RBA’,” he said.

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