© Reuters.  Aussie dips in Asia© Reuters. Aussie dips in Asia

Investing.com – The Aussie dipped slightly on Friday as the central bank gave a dour view on inflation prospects and as investors looked to remarks from President Trump as he heads to Vietnam for an APEC summit with U.S. foreign trade and domestic tax policy dominating market headlines.

USD/JPY eased 0.04% to 113.43, while AUD/USD traded at 0.7678, down 0.03%. EUR/USD was last quoted at 1.1646, up 0.03%.

Australia’s central bank has cut its forecasts for core inflation which it no longer expects to reach the floor of its 2%-3% target band until early 2019, a strong signal that rates won’t rise for a long time to come.

“Inflation and wage growth remain low. Both are expected to increase only gradually over time,” Governor Phil Lowe said.

“Important uncertainties influencing the outlook for inflation include questions of how much wage growth might pick up as the labour market tightens, and how quickly the resulting increase in labour costs might feed into inflation.”

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.01% to 94.41.

Overnight, the dollar traded lower against the dollar index amid fears the Senate would derail Trump’s tax reform plan after news surfaced that the Senate would delay corporate tax cuts until 2019.

Senate Republicans on Thursday plan to propose delaying a cut in the corporate tax rate from 35% to 20% until 2019, The Washington Post reported on Thursday, citing four people briefed on the planning. The move to delay corporate tax represents a significant shift from President Donald Trump’s view that immediate tax cuts are needed to stimulate the economy.

Also weighing on the dollar was a report showing weakness in the labor market after initial jobless claims rose more than expected last week.

The U.S. Department of Labor reported Thursday that initial jobless claims increased 10,000 to a seasonally adjusted 239,000 for the week ended Nov. 4, above forecasts of a 2,000 increase to 232,000.

In Europe, the euro rose sharply against the dollar after the European Commission revised up growth forecast for the Eurozone this year but lowered next year’s growth estimates.

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