The Australian dollar has briefly dropped below 74 US cents after Federal Reserve Chair Janet Yellen flagged a rate rise is on the horizon.
At 1200 AEDT on Friday, the local unit was trading at 74.03 US cents, down from 74.79 cents on Thursday. It hit a low of 73.9 US cents at 1135 AEDT.
Ms Yellen said the Fed could raise its interest rate “relatively soon” due to further improvement in the US job market and a pick-up in inflation.
That has boosted market expectations of a rate hike in December.
Stephen Innes, senior currency trader at FX and CFD provider OANDA Australia and Asia Pacific, said the Aussie has been under pressure all week because of the steeper US yield curve and softer outlook for commodity prices.
“Yesterday’s underwhelming domestic employment data was the driver for traders to stick the fork in the pair,” Mr Innes said.
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