The Australian dollar inched higher on Friday, with cautious investors and a lack of fresh data keeping the currency within a limited range.
At the local close, the dollar was trading at $US0.9220, up from Thursday’s close of $US0.9203.
The dollar hovered near a record high against a beleaguered euro as worries about Greece's fiscal problems kept the common currency under pressure.
The euro struggled at $1.4769, a whisker from a record low of $1.4759 hit offshore on Thursday, hurt by concerns that ongoing tension among euro zone nations on how to help Greece would render any form of aid difficult.
Yet, dealers said few investors were actively buying the Australian dollar against the euro. They said most of the euro's weakness against the Aussie was a result of its fall against the US dollar.
Instead, traders said they were happy to just sit tight on their investments in the Australian dollar given its bright outlook based on expectations of more domestic interest rate rises.
Against the US dollar, the Australian dollar opened slightly firmer at $US0.9213, having touched a high of $US0.9245 during the offshore session.
Speculation the US Federal Reserve was set to raise its discount rate initially pushed the US dollar higher, but the move came unstuck after the rumours proved unfounded. That helped lift the Australian dollar back above $US0.9200.
The discount rate is the interest rate the US Federal Reserve charges banks to borrow money directly from the central bank.
The Australian dollar suffered from a lack of direction and kept within a tight range during Friday’s local session, amid a lack of economic data and a flat day on equity markets.
Nomura Australia chief economist Stephen Roberts said most markets were suffering from little new information and lingering investor caution.
‘‘It’s just keeping people sidelined,’’ Mr Roberts said. ‘‘Not too many people out there are going to take a brave position and try and say it is going to go in whichever direction because there is nothing to really drive it in the near term.
‘‘You need some sort of stage left surprise event from somewhere to make a difference and you can’t forecast those.’’
There was no US economic data release due during Friday night’s offshore session.
Mr Roberts said he expected currency markets to take their cues from how Wall Street fared at the end of a week where the broad market S&P 500 has risen 1.4 per cent so far.
AAP
