Australian Dollar Weakens Amid Risk Aversion

The Australian dollar slipped against its major rivals in the European session on Friday, as sentiment faded on U.S. tax reform worries, while the Reserve Bank of Australia's downgrade of inflation forecasts also weighed.

Investors continued to fret about the prospects for tax overhaul, after Senate Republicans proposed to delay the corporate tax cut until 2019

Also, the Senate's tax reform bill unveiled on Thursday contrasted with a version proposed by the House of Representatives.

In its quarterly Statement on Monetary Policy, the RBA estimated only a gradual rise in headline inflation in 2018 and 2019.

Inflation is forecast to rise slightly to 2.25 percent in the year ending December 2018 from an estimated 2 percent in the year to December 2017.

Inflation was projected to remain at 2.25 percent until the year ending December 2019.

In August, the bank had projected 1.5-2.5 percent inflation for December 2017 and 1.75-2.75 percent in December 2018.

The currency was higher against its major rivals in the Asian session with the exception of the yen.

The aussie retreated to 86.91 against the yen and 1.1041 against the kiwi, from its early high of 87.25 and a 2-day high of 1.1094, respectively. The aussie is seen finding support around 85.00 against the yen and 1.09 against the kiwi.

The aussie slipped to a new 4-week low of 0.9708 against the loonie, after having advanced to 0.9748 at 2:00 am ET. Continuation of the aussie's downtrend may see it challenging support around the 0.96 mark.

The aussie reversed from an early high of 1.5137 against the euro, weakening to a session's low of 1.5201. Against the greenback, the aussie dropped to 0.7661, off its early 3-day high of 0.7695. The next possible support for the aussie is seen around 1.53 against the euro and 0.75 against the greenback.

Looking ahead, the University of Michigan's preliminary consumer sentiment index for November is set for release at 10:00 am ET.