The Australian dollar fell as the central bank cut its outlook for inflation and growth, suggesting there may be further room to ease the cash rate from a record low 2% and trade data from China was downbeat. AUD/USD traded at 0.7872, down 0.42, while USD/JPY traded at 119.95, up 0.17. he new forecasts in the quarterly Statement of Monetary Policy assumed the cash rate would move in line with market pricing. Assumptions for the Australian dollar, the trade-weighted index and oil prices were higher compared with February and in line with current prices. On Thursday the money market was pricing in a maximum of 13 basis points of cash-rate cut by November. Underlying inflation, which is used to monitor the 2% to 3% target band is seen at 2.50% by December, down from a range of 2% to 3%. GDP is seen at 2.50% growth, down from a range of 2% to 3%. Further out to June 2017, assessments were also downgraded for both growth and inflation. Elsewhere, the Bank of Japan board sees the output gap improving, according to minutes of the April board meeting released on Friday, but also concern about the ability to hit a target of 2% sustained inflation in the coming year. “Some members expressed the view that the start of a reduction in the BoJ’s paces of asset purchases at this point – when Japan’s economy was still on its way to achieving the price stability target of 2% – was likely to constrain the effects of its policy measures,” the minutes showed. Also today, China’s April trade data showed exports fell 6.2% in April year-on-year and imports slumped 16.1% with a trade surplus of $34.13 billion. Expectations were for a 2.4% gain in exports in April year-on-year, and a 12% drop in imports for a trade surplus of $39.45 billion. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.05% to 94.78. Overnight, the dollar pushed higher against a basket of other major currencies on Thursday, after data showed that the number of people who filed for unemployment assistance in the U.S. rose less than expected last week and as markets turned to Friday’s nonfarm payrolls report. In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 2 rose by 3,000 to 265,000 from the previous week’s total of 262,000. Analysts had expected initial jobless claims to rise by 18,000 to 280,000 last week. The data eased concerns over the strength of the U.S. job market after payroll processing firm ADP said on Wednesday that U.S. non-farm private employment rose by 169,000 last month, below expectations for an increase of 200,000. Investors were now looking ahead to Friday’s employment report for further indications on the health of the U.S. job market.