The Australian dollar fell in late trade on Friday, unable to hang on to the early gains it made in response to China's latest economic growth figures.
At 1700 AEST on Friday the Australian dollar was trading at 101.58 US cents, down from 101.64 US cents in late trade on Thursday.
The local currency bounced after China said its economy grew by 7.6 per cent in the second quarter of 2012.
The Australian dollar rose by almost one fifth of a US cent almost immediately after the Chinese data was released before settling into a tight trading range in the afternoon.
While the pace of gross domestic product (GDP) growth was the slowest seen in China in more than three years, it was in line with market expectations.
ANZ Banking Group foreign exchange strategist Andrew Salter said the Australian dollar enjoyed a brief rally amid relief that the data was not as bad as many feared.
But he said the local currency was now expected to continue its drift back towards parity with the US dollar.
"What those numbers show is that the Chinese economy is starting to slow down, and we could see the dollar fall towards parity next week," he said.
At 1700 AEST, the Australian currency was trading at 80.50 Japanese yen, up from 80.63 yen on Thursday, and 83.32 euro cents, up from 83.14 euro cents.
Meanwhile, Australian bond futures prices fell after the release of the Chinese data.
At 1630 AEST on Friday, the September 10-year bond futures contract was trading at 97.210 (implying a yields of 2.790 per cent), down from 97.215 (2.785 per cent) on Thursday.
The September three-year bond futures contract was at 97.830 (2.170 per cent), down from 97.840 (2.160 per cent) previously.
Commonwealth Bank head of debt research Adam Donaldson said the bond market had responded with relief to the Chinese GDP numbers.
"There was definitely a mood of apprehension ahead of the data, that it might confirm fears about a more broadly based global slowdown," he said.
"But the data came close to expectations, and on the back of that we did see a rally in equities and the Aussie dollar, and bonds just came off as a result of that."
Keep reading - next article