The Australian dollar has softened in overnight trade following dovish comments from the U.S. Federal Reserve after it left official interest rates on hold.
At 0700 local time (AEDT) on Thursday, the Australian dollar was trading at 70.22 U.S. cents, down from 70.29 U.S. cents at Wednesday's Asian close. Despite the U.S. dollar softening, all commodity-based currencies were weaker on the implications of softer U.S. growth on global commodity demand, Commonwealth Bank of Australia chief currency strategist Richard Grace said on Thursday.
"Consistent with this evidence is the fact that Australian exports to the U.S. have recently slowed after reaching a record high," Grace said. An insight into Australia's fourth quarter terms of trade is set to be released mid-morning, with a lower terms of trade key to the local unit falling over the coming months, Grace said. At 0943, the Australian dollar was trading at 70.31 U.S. cents.
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