Investing.com - The Aussie dropped after a downbeat assessment of the economic outlook by the central bank on Friday.
The Reserve Bank of Australia said the economic growth outlook for China and emerging economies has deteriorated while domestic conditions in housing pose higher risks in its Financial Stability Review released on Friday.
"The focus of global financial stability has been shifting to emerging-market economies and their potential to contribute to destabilizing adjustments in financial markets," the RBA said. The growth outlook for China and other emerging-market economies has deteriorated.
"In addition lower commodity prices, fiscal pressure and political instability are compounding the situation in some cases," the RBA said.
Earlier, the Kiwi fell in Asia on Friday despite slightly higher consumer inflation in the third quarter than expected.
In New Zealand, consumer prices gained 0.3% in the third quarter, above the 0.2% rise expected. NZD/USD traded at 0.6829, down 0.32%, after the data. The consumer price index is running slightly higher than Reserve Bank expectations and the strong tradable inflation in this and the previous quarter indicates the fall in the New Zealand exchange rate over the past 15 months is having some effect on prices of
imports.
Elsewhere, AUD/USD traded at 0.7303, down 0.34%, while USD/JPY changed hands at 119.16, up 0.22%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.15% to 94.60.
Overnight, the dollar remained broadly higher against the other major currencies on Thursday, easing off a two-and-a-half month trough as the release of upbeat U.S. data fuelled optimism over the health of the economy.
The U.S. Department of Labor reported on Thursday that the number of individuals filing for initial jobless benefits in the week ending October 10 decreased by 7,000 to 255,000 from the previous week’s total of 262,000.
Analysts had expected jobless claims to rise by 8,000 to 270,000.
Separately, the U.S. Commerce Department said that consumer prices fell 0.2% last month, matching forecasts and following a fall of 0.1% in August.
Year-over-year, consumer prices were flat in September, compared to expectations for a 0.1% slip.
Core consumer prices, which exclude food and energy costs, increased by 0.2%, above expectations for a gain of 0.1%.
In addition, the Federal Reserve Bank of New York said that its general business conditions index improved to -11.4 this month from a reading of -14.7 in September. Analysts had expected the index to rise to -8.0 in October.
The Federal Reserve Bank of Philadelphia said that its manufacturing index improved to -4.5 this month from September's reading of -6.0. Analysts had expected the index to rise to -1.0 in October.