SYDNEY--The Australian dollar was little changed late Thursday but is looking shaky amid market expectations for a stronger U.S. dollar and the fading prospect of further policy stimulus for the world's largest economy.
Much of the action in Australian markets Thursday took place in the government bond market, which saw heavy selling after the U.S. Treasury market weakened overnight. Australian bond yields followed the lead and rose to three-month highs during the session.
Stronger-than-expected U.S. economic data this week has seen markets lower their expectations that the U.S. central bank will unveil more quantitative easing to support economic growth.
"Having continued to cling onto QE hopes for most of the year, traders are now definitely questioning whether we'll see any further QE at all," said David Scutt, a currency trader at Arab Bank.
At 0725 GMT the Australian dollar was at US$1.0475, unchanged from late Wednesday and at Y83.01 up from Y82.62.
Late comments by Reserve Bank of Australia Assistant Governor Guy Debelle about the central bank's concern over the level of the Australian dollar were largely ignored.
Mr. Debelle told a conference late Thursday played down recent commentary from the RBA on the strength of the currency despite falling commodity prices, saying it was nothing new.
"We've been saying that for nine months and finally people read it," Debelle said.
