$A lower on concern about US debt talks
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SYDNEY, Nov 30 AAP
November 30 2012, 07:19AM
The Australian dollar is around a third of a US cent lower on negative sentiment surrounding US debt negotiations.
At 0700 AEDT on Friday, the currency was trading at 104.34 US cents, down from 104.67 US cents on Thursday afternoon.
HIFX senior trader Stuart Ive said the Australian dollar fell as low as 104.20 US cents overnight after US House Of Representatives Speaker John Boehner warned no substantive progress had been made in budget talks between Republicans and Democrats.
US politicians are attempting to negotiate measures to bring down the country's budget deficit to avoid a so-called `fiscal cliff' of spending cuts and tax hikes due to automatically apply in 2013, which could drag the world's largest economy back into recession.
But Mr Ive said optimistic statements from Democrats about the negotiations had helped lift the currency from its low point.
"Basically it's all about the fiscal cliff," he said.
However, BK Asset management managing director Kathy Lien said a weaker domestic business investment outlook also hurt the currency overnight.
Official data released on Thursday showed a downwards revision to private sector capital expenditure plans for 2012/13, which increased expectations the Reserve Bank of Australia (RBA) would cut interest rates at its December 4 board meeting.
"Weaker business investment is weighing on the Australian dollar and renewing talk of rate cuts by the RBA," she said.
Mr Ive said that, with no major local economic data to be released, the currency was likely to trade in a narrow range on Friday.