Dollar loses ground


dollar, moneyThe Australian dollar has lost some ground amid more evidence that US employment growth is picking up pace.

At 0700 AEST on Friday, the local unit was trading at 91.22 US cents, down from 91.56 cents on Thursday.

On Thursday night, US payrolls firm ADP reported private sector job growth slowed in August but remained in line with the monthly average over the last 12 months.

Businesses added a net 176,000 jobs in August, compared with a revised figure of 198,000 in July.

The US Labor Department said Americans filed fewer claims for unemployment benefits last week as the pace of layoffs continued to slacken.

Bank of New Zealand currency strategist Mike Jones said the data bolstered expectations the US Federal Reserve will announce a tapering of economic stimulus at its policy meeting later this month.

“There was a whole stream of data that came out on the upbeat side of expectation,” he said from Auckland.

“There was an increase in US bond yields and a strengthened US dollar and those factors have taken the shine off the Aussie dollar.

“Tapering looks like a done deal on the strength of last night’s data.”

Investors are now waiting on the release on Friday of US non-farm payrolls for August, the key American employment indicator.

It will be the last major US data release before the Federal Reserve’s policy meeting on September 17-18, and a strong result could see further US dollar strength, which will push the Aussie dollar lower.


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