The Australian dollar is lower after the US Federal Reserve's policy-making arm stopped short of announcing a fresh round of economic stimulus.
Traders said the Fed did the bare minimum it could, as there had been an expectation of a third round of an economic stimulus program called quantitative easing.
At 1700 AEST on Thursday, the local unit was trading at 104.77 US cents, down from 105.04 cents on Wednesday.
St George economist Janu Chan said strong domestic retail trade failed to boost the Australian dollar.
The local currency fell after a disappointing outcome to the Federal Open Market Committee (FOMC) meeting in the United States overnight, she said.
"The dollar came off overnight on the back of the (FOMC) statement, in disappointment that the Fed didn't take any action," she said.
"After the data, it recovered slightly but it's still down from overnight."
Official data showed that retail trade in Australia rose 1.0 per cent in June - higher than the 0.6 per cent rise expected by the market.
Separate official figures showed that the Australian trade balance returned to surplus albeit a modest one in June, due mainly to a sharp fall in the value of imports.
Ms Chan said a much anticipated meeting of the European Central Bank (ECB), on Thursday night Australian time, should be the dominant influence on the local currency overnight.
"I suspect people are waiting for the ECB meeting tonight and we won't see much action until then," she said.
At 1700 AEST, the Australian dollar was at 82.21 Japanese yen, up from Wednesday's close of 82.04 yen, and at 85.58 euro cents, up from 85.32 euro cents.
Meanwhile, Australian bond futures prices are lower.
At 1630 AEST on Thursday, the September 10-year bond futures contract was trading at 96.940 (implying a yield of 3.060 per cent), down from 96.970 (3.030 per cent) on Wednesday.
The September three-year bond futures contract was at 97.390 (2.610 per cent), down from 97.440 (2.560 per cent).
Commonwealth Bank interest rate strategist Phillip Brown said it was the FOMC meeting which drove bond prices down.
"If you look at the intraday movement, the three-year bond price had already moved about seven basis points before the (domestic) data came out this morning," he said.
Mr Brown said the market was eagerly anticipating the ECB meeting on Thursday night.
"It's one of the most unpredictable events I've ever had to predict," he said.
"We're slightly concerned that because (ECB president) Mario Draghi has talked this up so much, it's going to be hard for them to meet expectations."
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