Forex - AUD/USD down in Asia on higher U.S. treasury yields

Investing.com – The Australian dollar remained weaker against the U.S. dollar on Friday in Asia after U.S. treasury yields rose to their highest since July 2011.

The benchmark 10-year yield rose to 3.071% boosting the dollar against most major currencies as higher yields make dollar dominated assets more attractive

AUD/USD traded at 0.8904 down 0.06%, NZD/USD traded flat at 0.8185, while USD/JPY traded at 104.84 up 0.04% with Japanese markets remain closed on Friday.

On the data front, the Chinese Non-Manufacturing PMI for December is due at 0900 local time (0100 GMT). The November reading on services came in at 56.

Elsewhere the U.S. dollar traded higher against most major currencies on Thursday after U.S. weekly jobless claims fell while a widely-watched U.S. factory barometer met market forecasts and cemented expectations for the Federal Reserve to continue winding down stimulus programs. The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Dec. 28 declined by 2,000 to a seasonally adjusted 339,000.

Analysts had expected U.S. jobless claims to fall by 7,000 to 334,000 last week from the previous week’s revised total of 341,000, though investors still applauded the decrease.

The Institute for Supply Management reported that its purchasing managers' index dipped to 57.0 last month from 57.3 in November, in line with expectations.

The data fueled market sentiments for the Federal Reserve to continue dismantling its USD75 billion in monthly bond purchases this year.

Fed asset purchases aim to drive recovery by suppressing long-term borrowing costs, weakening the dollar as long as they remain in effect.

Meanwhile in the euro zone, the London-based Markit Economics research group said its final manufacturing purchasing managers' index for the bloc remained unchanged at 52.7 last month, in line with expectations.

A separate report showed that Germany's manufacturing PMI rose to a 30-month high of 54.3 in December from 54.2 in November, beating consensus forecasts for an unchanged reading.

France's manufacturing PMI fell to a seven-month low of 47.0 in December, from 47.1 in November, compared to expectations for the index to remain unchanged.

Still, risk appetite took a hit after a report showed that China’s final HSBC PMI inched down to 50.5 in December from a reading of 50.8 in November, which bolstered the greenback's safe-haven appeal.

The data came a day after a government report showed that China’s manufacturing PMI fell to a four-month low of 51.0 last month from 51.4 in November and worse than forecasts for a decline to 51.2.

GBP/USD was down 0.05% at 1.6442, EUR/USD was down 0.05% at 1.3662. The dollar was up against the Swiss franc, with USD/CHF up 0.04% at 0.8992.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 80.71.