Technical chart shows support lies around $0.6690, while the Aussie is facing resistance near $0.6800, a level it has breached three times in the past week but has failed to sustain above. Australian government bond futures were flat, with the three-year bond contract at 99.33 and the 10-year contract at 99.055.
In New Zealand, the kiwi dollar trod water at $0.6294 after gaining 0.4% overnight, following remarks by the country's central bank governor Adrian Orr that unconventional monetary policy was unlikely to be deployed in the country. The kiwi is up 0.6% so far this week, on track for its first gain after two straight weekly losses. "The AUD remains vulnerable to the downside," said Rodrigo Catril, senior forex strategist at National Australia Bank, as expectations for a rate cut gather momentum.
Financial markets are now pricing in a 76.5% chance of the Reserve Bank of Australia (RBA) reducing the cash rate for the third time this year to 0.75% at its October 1 board meeting. The case for a cut was cemented after a speech by RBA Governor Philip Lowe on Tuesday, which indicated more cuts to interest rates may be needed and that the board would "again take stock of the evidence" next week.
Heightened risks from political tensions in the United States to uncertainties about the near-term fate of the Sino-US trade war also kept wary investors at bay. "Whereas in August (Orr) was keen to play up the possibility of negative rates and unconventional monetary policy, he gave a more circumspect perspective," on Thursday, NAB's Catril said.