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The Australian dollar is higher ahead of company results season while the currency looks set to lose ground due to monetary policy tightening from the US Federal Reserve.

At 1700 AEST on Friday, the local unit was trading at 93.74 US cents, up from 93.58 cents on Thursday.

The Australian dollar climbed back above 93.60 US cents when Donald Trump tweeted that he would impose a 20 per cent tariff on US$50 billion of Chinese goods.

The Wall Street Journal reported that the president’s decision gave Beijing room to impose countermeasures.


In the early minutes of trading in Sydney, the local unit was trading at 93.34 US cents, up from 93.28 cents on Thursday.

At 1700 AEST, the Australian dollar was at 92.47 Japanese yen, up from 92.23 yen on Thursday, and at 72.31 euro cents, up from 72.08 euro cents.

On currency markets, Investors took heart from an FOMC rate increase last week, rather than take a long pause, FOMC head Jerome Powell said in testimony ahead of a US Senate Banking Committee hearing, the Australian Financial Review reports.

“The recent improvements in labour market indicators provide further reassurance that the US economy is strengthening despite a global economic slowdown,” CMC Markets strategist Michael McCarthy said.

However, recent international data has yet to provide a clear picture of underlying economic trends, he said.

“It is rather more a function of the inflow of data to the central bank, from Europe and from China,” Mr McCarthy said.

At 1700 AEST, the September quarter Australian dollar was at 92.33 Japanese yen, up from 92.12 yen on Thursday, and at 72.23 euro cents, up from 72.11 euro cents.

The September quarter Australian dollar was at 90.15 British pence, up from 89.14 pence on Thursday, and at 54.95 New Zealand cents, up from 54.93 New Zealand cents.

A further hiccup in the Australian dollar is likely to arise if the Federal Reserve does not increase its main interest rate next week and President Donald Trump does so within the next several weeks, ANZ’s currency strategist Imre Speizer said.

“I think the key event is likely going to be whether and when the US is still planning to tighten monetary policy,” Mr Speizer said.

“Trump is still a very positive stimulant for the Aussie dollar.”

The Aussie dollar was also helped by strength in the US dollar, with the euro hitting a two-week high and sterling hitting a 16-month high.

The Australian dollar fell to $0.7615 Japanese yen, down from $0.7529 on Thursday, and to $0.6872 New Zealand cents, up from $0.6877.