The Aussie fell in Asia in Friday after the central bank indirectly suggested that a record low cash rate of 1.5% would remain in place for now and as markets turned attention to U.S. nonfarm payrolls and key polls in France this weekend.
AUD/USD fell 0.19^% to 0.7395, while EUR/USD traded at 0.08% to 1.0975. USD/JPY rose 0.11% to 112.59.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.09% to 98.70.
The Reserve Bank of Australia relased its latest monetary policy statement on Friday with few surprises about economic growth expectations over the next two years and indirectly signaling that further interest rate cuts were off the table as wage gains are weaker than hoped, though house prices in some markets remain a worry.
“The forecast for the unemployment rate implies ongoing spare capacity in the labour market; this is likely to constrain wage outcomes in the period ahead,” Governor Philip Lowe said in the statement.
Overnight, the dollar slumped against a basket of major currencies on Thursday, weighed by a surge in the euro to six-month highs, as viewers’ polls declared that Emmanuel Macron won a TV presidential debate against Marine Le Pen, increasing the likelihood of a Macron victory at the runoff vote on Sunday.
Despite, a somewhat hawkish statement from the Federal Reserve on Wednesday, the dollar eased from highs, after investors piled into the euro after anti-EU candidate Marine Le Pen came off second best in the final debate against pro-EU candidate Emmanuel Macron ahead of the runoff vote for the French presidency, scheduled for Sunday.
Meanwhile, a mixed bag of U.S. economic data failed to lift dollar sentiment, as initial jobless claims fell more than expected while factory orders eased in March.
The U.S. Department of Labor reported that initial jobless claims decreased by 19,000 to 238,000 in the week ended April 29, well below economists’ estimates.
Elsewhere, The Commerce Department said factory orders edged up 0.2% in March, a significant slowdown from February’s gain of 1.2%, and below forecasts of 0.4% rise.
