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The risk-sensitive Australian dollar was down 0.2% to $ 0.7280 after hitting a one-week high of $ 0.73165.
Westpac expects the dollar index to stabilize at a slightly higher level by the end of the year, but will remain in the 92.0-93.5 range in the short term.
“The clear signal of the Fed downsizing and the gradual advance of rate takeoff plans, not to mention the ongoing uncertainty around Evergrande, should contain the downside,” Westpac strategists wrote in a report.
Meanwhile, the National Australia Bank said it would take a sharp drop in dollar sentiment to reach its year-end target of 89.6 for the dollar index, “and there are no obvious short-term triggers” for that, strategists wrote in a research note.
Several Fed officials are due to speak on Friday, including Chairman Jerome Powell, who delivers a keynote address at a Fed roster event.
(Report by Ritvik Carvalho; additional report by Kevin Buckland in Tokyo, Timothy Heritage edition)