The Australian dollar was lower late today as the US dollar strengthened broadly in the wake of more solid economic data from the world's largest economy.
Initial claims for US jobless benefits last week dropped to 344,000, compared with an expected 365,000, a positive indicator ahead of the release of US unemployment data in a week's time.
At 4pm, the Aussie was buying 1.0229 US cents, down from $1.0274 US cents late in local trade yesterday. It traded as low as $1.0207 US cents in Asia.
Data showing Chinese manufacturing activity was slower than expected in February damped interest in the Australian dollar, sending it to its day's lows.
China's official purchasing managers index for February was 50.1, compared with 50.4 in January, and undershooting economists' expectations of 50.5.
Traders are now looking into next week and the outcome of a central bank policy meeting on Tuesday.
The Reserve Bank of Australia is widely expected to keep its policy interest rate on hold at 3.0 per cent but leave the door ajar for further cuts should the economy need a boost in coming months.
Data this week, which has included solid business investment numbers, rising house prices and an improvement in manufacturing has helped promote a sense that interest rate cuts are gaining traction.
House prices are on the rise again in Australia after a near three-year hiatus, with data from RP Data-Rismark showing capital city dwelling prices rose 0.3 per cent in February, building on a 1.2 per cent monthly rise in January.
"This is one area where the RBA is finally getting some traction and buying the RBA more time to sit on their hands," said David de Garis, senior economist at National Australia Bank.
The RBA has lowered interest rates by 1.75 percentage points since late 2011 to insulate the economy against a global downturn, but to also spur growth in non-mining parts of the domestic economy.
Earlier Friday, Goldman Sachs announced it no longer sees a risk of an imminent cut in interest rates, saying it now expects a delay at least until June.
Financial markets now see just a 20 per cent chance of a rate cut next week.
