SYDNEY, June 10 (Xinhua) -- The Australian dollar has snapped its eight-day rally overnight from a greenback that firmed from encouraging U.S. labor market data.
At the Asian open on Friday, the Australian dollar was trading at 74.31 U.S. cents, down from 74.70 U.S. cents at Thursday's close.
The local unit has been drifting lower over the past 24 hours following a new one-month high at Thursday's Asian open, weighed by lower commodities, lower offshore equity markets and the firmer greenback.
"Currency traders have been yearning for a turn, and that's exactly what we saw today that U.S. stocks eased off year-to-date highs and the dollar rebounded against most of the major currencies," BK Asset Management managing director of currency strategy Kathy Lien said in a note.
The greenback was firmer after official U.S. jobs data showed initial claims for state unemployment fell by 4,000 to 264,000, instead of an expected rise to 270,000.
However it's unlikely the U.S. dollar will strengthen enough to push the Australian dollar lower unless more U.S. economic data strengthens enough to increase the chances of a near-term U.S. Federal Reserve rate hike, Commonwealth Bank of Australia chief currency strategist Richard Grace said.
"The diminishing odds of more RBA rate cuts, and the recent downward adjustment to U.S. interest rate expectations will continue to underpin the Australian dollar/U.S. dollar spread in the near term," Grace said, adding the market is pricing a zero chance of a U.S. rate hike in June, and only a 20 percent chance of a lift in July.
At 0957 local time (AEST), the Australian dollar was trading at 74.17 U.S. cents.
