Aussie dollar unchanged, fighting supportive and weighing pressures

The Australian dollar was virtually unchanged in overnight trade as the unit faced conflicting pressure as rises in oil boosted commodities and commodity based currencies, but was weighed by a strengthening greenback and falls in iron ore.

At the Asian open on Friday, the local unit was trading at 73.24 U.S. cents, just slightly higher from 73.20 U.S. cents at Thursdays close.

Benchmark crude bounced to a six month high overnight after the International Energy Agency said global oil stocks would experience a drastic reduction in the second half of the year from strong demand and falling supply by some major producers.

The bounce in crude boosted commodities and commodity based currencies, however falls in iron ore and a slightly strengthening greenback is putting pressure on the Australian dollar.

"Comments from two (U.S. Federal Open Market Committee) voters supported the U.S. dollar (with) Eric Rosengren (warning) that the likelihood of Fed rate hikes is higher than market pricing," Commonwealth Bank of Australia senior currency strategist Elias Haddad said.

The Australian dollar is also likely to be weighted in the near term as the prospect of additional rate cuts by the Reserve Bank of Australia increase, with strategists expected the unit to hit mid-72 U.S. cents.

"Nonetheless, the Australian dollar downside is limited because commodity prices are in a bottoming-out process and the Feds tightening cycle will be very gradual," Haddad said.

By 1003 local time (AEST), the unit had slipped to 73.18 U.S cents. Endit