Aussie dollar slips with key industrial commodities

The Australian dollar has slipped below 73 U.S. cents overnight however it is still finding support from positive local data released during the week despite continued falls in commodities.

At 0700 local time (AEDT) on Friday, the local unit was trading at 72.89 U.S. cents, up from 72.86 cents at Thursday's Asian close.

Better than expected labour market data released on Thursday showing Australia's unemployment at its lowest level since April 2014 spiked the Aussie to trade above 73 U.S cents on consensus the Reserve Bank of Australia is unlikely to ease monetary policy.

"The positive Australian data flow is providing an offset to the downside pressures on the Australian dollar from lower commodity prices," the Commonwealth Bank of Australia said in their morning note.

Key industrial commodities continued their downwards trajectory, notably iron ore with 62 percent fines for delivery to Qingdao down 1.4 percent to 38.52 U.S. dollars per dry ton, which is adding pressure on the local unit.

The West Texas Intermediate (WTI) and benchmark Brent Crude slipped almost one percent overnight despite a drop in U.S. petroleum inventories with traders instead focusing on an increasing global supply glut.

The Australian dollar could rise slightly against the greenback in the next week "as history has shown a consistent pattern of a U.S. dollar selloff at the beginning of a rate hike cycle," IG market analyst Angus Nicholson said.

The U.S. Federal Reserve is expected to raise the official interest rate at its next two-day meeting beginning Dec. 15. Endit