Strengthening greenback sees Aussie dollar flat in overnight trade

The Australian dollar has opened local trade flat on Thursday after the greenback regained ground overnight on heightened expectations of U.S. rate lift-off and the further sinking of commodities.

At 0700 AEDT on Thursday, the local unit was trading at 73.05 cents, level with the Asian close on Wednesday.

The Aussie pared back its overnight high of 73.43 U.S. cents on the release of positive local economic data as the U.S. dollar made a new cyclical high on encouraging labor market data, reinforcing the case for a December rate hike by the U.S. Federal Reserve.

The strong dollar did no favors to commodity prices overnight, especially oil which saw the West Texas Intermediate oil price fall 4.4 percent after oil inventories increased, further weighing on the local unit.

The Australian dollar is likely to remain under pressure, albeit marginally, during local trade as Australia's trade deficit is expected to widen, Elias Haddad, Director Currency and International Economics at the Commonwealth Bank of Australia said.

The longer-term outlook for the Australian dollar however remains to the downside after overshooting the level implied by the iron ore price, a strengthening U.S. dollar on fed rate expectations and poor Australian business investment remaining a drag on the local economy, Haddad said.

At 1018 local time, the Australian dollar was trading at 73.03 U.S. cents. Endit