The Australian dollar fell across the board on Friday in the wake of disappointing trade numbers in China and a warning from the RBA that a high currency posed an important risk to growth.

The Aussie slipped 0.6 per cent on the day to a one-week low around $US1.0511, retreating from a 4-1/2 month high of $US1.0615 set on Thursday. It was on track to post a loss of 0.5 per cent for the week.

The currency fell after China's July exports rose just 1 per cent from a year earlier, undershooting forecasts by a big margin and boosting expectations of fresh government action to shore up the economy.

The Australian dollar tends to be very sensitive to news out of China, its single biggest export market.

The currency had already been under modest pressure after the Reserve Bank warned persistent strength in the Aussie could be a bigger drag on the economy than before, even as it upgraded its economic outlook.

In its quarterly statement of monetary policy released earlier on Friday, the RBA lifted its forecast for annual growth to a robust 3.5 per cent for this year, from 3 percent.

Alvin Pontoh, a macro strategist at TD Securities in Singapore, said investors chose to ignore the RBA's upbeat economic outlook and focused on China, adding the sell off was a bit harsh.

"Weaker Chinese data only means that policy makers will continue to pour more stimulus in the economy, so it's not bad," he argued. "Markets were looking for an excuse to sell because the risk rally is looking a bit tired."

The Australian dollar has risen 8 per cent in trade-weighted terms since a trough in early June. It has been a major beneficiary of strong demand from central banks and sovereign funds chasing yield in AAA-rated government bonds.

Charts indicate key support around $US1.0433-37, the 20-day moving average and August low.

"As long as it remains above that, the uptrend remains valid," said a trader.

Resistance is found at $US1.0615, ahead of the mid-March high of $US1.0657.

The Aussie also lost ground against the yen and euro. It even recoiled against a wobbly kiwi, pulling back from a two-week high of $NZ1.3044 set on Thursday to last fetch $NZ1.2984.

Australian bond futures bounced from recent three-month lows, with the three-year contract up 0.12 points at 97.320, while the 10-year contract put on 0.09 points to 96.850.

Reuters