Dollar higher on weak US data

Money, dollar, notes,pay, wagesThe Australian dollar has briefly passed 77 US cents after the release of a batch of weak US economic data, before dropping back.

At 0700 AEST on Thursday, the local unit was trading at 76.79 US cents, up from 76.00 cents on Wednesday.

Early on Thursday morning, it peaked at 77.01 US cents, its highest level since Friday.

US industrial production fell 0.6 per cent in March, twice what the market was expecting, because utility output fell as bad winter weather faded, figures from the US Federal Reserve show.

Westpac senior market strategist, Imre Speizer, said it was the second night in a row that the Australian dollar had benefited from US dollar weakness.

“The US dollar fell again overnight, while equities and most commodities rose, mainly due to US economic data disappointment,” he said.

“These Fed sourced figures paint a clear picture of an industrial sector that has struggled for some months now.”

Speizer expects the Australian dollar to fall in the coming weeks, on the back of lower commodity prices and an expected May interest rate cut by the Reserve Bank of Australia.

On Thursday, markets will focus on the release of Australian employment figures, which are expected to show that the unemployment rate stayed steady at 6.3 per cent in March.

The number of people with jobs is expected to have risen by 15,000, a rate that only just manages to keep up with population growth.

AAP

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