Dollar low off US jobs


piggy bank, coins, money, dollarThe Australian dollar is lower after a surprisingly strong US jobs report.

The report increased the likelihood that the Federal Reserve’s quantitative easing could be wound back sooner rather than later.

At 0700 AEDT on Monday, the local unit was trading at 93.85 US cents, down from 94.65 cents on Friday.

US employers added 204,000 jobs in October: an unexpected boost given that the federal government was partially shut down for 16 days.

Employers also added 60,000 more jobs in the previous two months than earlier estimated.

Investors bought US dollars aggressively on the back of the figures, said BK Asset Management managing director Kathy Lien.

She said recent US economic reports showed the October government shutdown had had little impact on the economy.

“Considering that the most optimistic forecast from economists was for 175,000 jobs, investors were clearly not positioned for such a strong report,” said Lien.

“The recent string of positive economic surprises has made policymakers more optimistic and willing to consider advancing their plans for tapering.

“If the government shutdown did not happen, the unemployment rate could be at 7.0 per cent and with the anticipated snapback in government jobs in November, labour market conditions are strong enough for December tapering to be a serious option for the US Federal Reserve.”


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