Dollar bounces back

 

Dollar, coinThe Australian dollar has recovered some of the losses made after the shock rise in the unemployment rate.

At 0700 AEST on Friday, the local unit was trading at 92.72 US cents, up from 92.66 cents on Thursday.

Australia’s jobless rate jumped to a 12 year high of 6.4 per cent in July, from six per cent a month earlier.

The currency initially dropped half a US cent after the release of the figures and bottomed out at a two month low of 92.59 US cents, late on Thursday night.

BK Asset Management MD, Kathy Lien, said the Australian dollar suffered a big sell off after the jobs data.

“Investors anticipated a healthy number and were, instead, caught completely off guard,” she said.

Lien said the Australian dollar could have fallen further but expectations of more encouraging economic data from China, due out on Friday morning, had helped limit the losses.

China’s international trade surplus is expected to fall to $US26 billion ($A28.13 billion) in July from $US31.5 billion in June.

“Chinese data has been good and if exports rise strongly, it could halt the decline in the Australian dollar,” Lien said.

“China’s economy has been experiencing a nice recovery with government stimulus and resurgent demand for Chinese exports expected to pave the way for a summer rebound.”

AAP

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