The Australian dollar rose from a 10-day low against the US dollar on Friday, helped by gains in stock markets and a growing appetite for risky carry trades as the Bank of Japan kept interest rates unchanged.
But gains were checked by fading expectations of a near-term rate rise by Australia's central bank and ahead of the US consumer price inflation data, which could give more clues on the rate outlook in the United States. The core consumer price index (CPI) is expected to have risen 0.2 percent in May from a month earlier.
"The market here is waiting for the US CPI data and digesting the fact that an imminent rate hike locally is unlikely," said Su-Lin Ong, strategist at RBC Capital Markets. The Aussie dollar was quoted at $0.8367/8370, down from $0.8385/87 here late on Thursday. It fell to a 10-day low of $0.8333 in offshore trade.
The broadly weaker yen helped the Aussie recover. The Aussie was near 15-year highs against the Japanese currency, trading at 102.90/103.00 yen as carry trades continued to find favour.
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