The Australian dollar is sharply lower against its US counterpart, dropping below 74 US cents after local and Chinese economic data disappointed.

At 0635 AEST on Friday, the Australian dollar was worth 73.76 US cents, down from 74.07 US cents on Thursday.

Westpac’s Imre Speizer said disappointing capital expenditure figures, slowing Chinese manufacturing activity and a two per cent drop in the price of iron ore had all impacted the local currency.

“(The) underperformer AUD fell from 0.7420 to 0.7373, weighed down by disappointing CAPEX and China PMI data, as well as ongoing weakness in iron ore prices,” he said in a morning note.

He said iron ore had dropped two per cent to an eight-month low of $US56.

Meanwhile the greenback had strengthened, with the US dollar index lifting 0.3 per cent.

On Friday, he could see the Aussie dollar further impacted by the falling iron ore price and sliding as low as 73.30 US cents.

The local currency is also lower against the yen and the euro.

AAP

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