Investing.com - The Australian dollar ticked higher on Friday as investors noted a cautious tone in September minutes of the Federal Reserve's policy review as a signal rates are on hold for at least another month.
In particular, concern about China was key in the Federal Reserve’s decision to keep interest rates near zero, minutes from the last meeting released Thursday show.
“Many [officials] acknowledged that recent global economic and financial developments may have increased the downside risks to economic activity somewhat,” the minutes from the Federal Open Market Committee said.
The relatively dovish minutes from the September meeting may bolster arguments that the FOMC could wait as long as March of next year before lift-off. Previously, it was widely believed the FOMC could raise rates either this month or when it meets in December. A rate hike is viewed as bullish for the dollar, as foreign investors pile into the greenback looking to capitalize on higher yields.
In Australia, August housing finance rose 2.9%, below the expected gain of 5.0%, though up from a 0.3% fall in the previous month.
AUD/USD traded at 0.7262, up 0.05%, while USD/JPY changed hands at 119.91, down 0.01%.
The US dollar index, which tracks the greenback against a basket of six major rivals, wfell 0.06% at 95.35.
Overnight, the dollar was trading close to three-week lows against the other major currencies on Thursday.
Investors were set to scrutinize the minutes of the Fed’s September meeting for any clues on whether it will hike rates before the years end or wait until 2016.
The dollar has come under pressure since last Friday’s weaker than expected U.S. jobs report prompted investors to push back expectations on the timing of an initial rate hike to next year.
Earlier Thursday data showed that the number of people filing first time claims for jobless benefits in the U.S. last week fell to the lowest level in almost 42 years, indicating that the labor markets is continuing to tighten despite the slowdown in job creation.
The Labor Department said the number of initial jobless claims in the week ending October 3 fell by 13,000 to 263,000 from the previous week’s downwardly revised total of 276,000.