THE Australian dollar ended steady after losing earlier ground ahead of key decision about economic stimulus by the US Federal Reserve.
At 5pm (AEDT), the Australian dollar was trading at 97.62 US cents, slightly up from Thursday's close of 97.60 US cents.
Since 7am, the local unit traded in a tight range between 97.42 US cents and 97.95 cents.
IG Markets institutional trader Chris Weston said the Australian dollar came under pressure during domestic trade after an overnight rally.
"We seem to have pulled back a little bit throughout the domestic session and I think that's mainly due to market weakness," Mr Weston said.
"The Australian dollar, that proxy of risk, seems to have come back a little throughout the Asian session."
He said the local unit lost ground against all of the major currencies.
"My rationale for that is that we are seeing an element of caution settling in to the highest yielding currency, the Aussie dollar, and we're probably seeing a bit of position squaring ahead of the FOMC (US Federal Open Markets Committee) meeting."
The Australian share market closed lower on Friday as a slew of upcoming offshore events led to renewed caution among investors.
Investors are awaiting a likely announcement of another round of quantitative easing (QE) in the US, mid-term US Congressional elections, the Reserve Bank of Australia's decision on interest rates and central bank meetings in the UK, Europe and Japan.
Mr Weston said the main driver for the next few days would be talk over quantitative easing, which was when the US Federal Reserve buys government bonds from banks in an effort to encourage them to lend more money and stimulate the struggling US economy.
The FOMC of the US Federal Reserve is expected to announce the decision on another round of quantitative easing after its meeting on November 3.
At 1700 AEDT, the Australian dollar was at 78.78 Japanese yen, down from Thursday's close of 79.64 yen, and at 70.35 euro cents, down from its previous close of 70.59.
The euro finished at 1.3875 US dollars, up from 1.3823 US dollars, and at 111.98 yen, down from 112.82.
The US dollar was at 80.70 Japanese yen, down from 81.61 yen on Thursday.
Australian bonds closed mixed after weak domestic credit data failed to inspire safe haven asset buying ahead of key central bank decisions next week.
At 1630 AEDT on Friday on the ASX 24, the December 10-year bond futures contract was at 94.765 (implying a yield of 5.235 per cent), down from 94.785 (implying a yield of 5.215).
The December three-year bond futures contract was at 95.080 (4.920 per cent), up a touch from Thursday's close of 95.070 (4.930).
4Cast Financial Markets head of research Ray Attrill said the market was well supported early in the trading day by weak credit data from the Reserve Bank of Australia (RBA).
The data, released on Friday, showed total credit rose just 0.1 per cent in September for an annual rate of 3.3 per cent, a shade above the 3.2 per cent seen in August.
However, credit remains well below the double-digit growth seen prior to the global financial crisis.
The 90-day bank bill closed at 4.780 per cent, up from 4.760 per cent on Thursday, while the 180-day bank bill rate was at 5.000, up from 4.990.
The RBA's trade weighted index (TWI) was unchanged from Thursday's close of 72.9.
