Dollar lower on US jobs data


coins,dollarThe Australian dollar is lower after the release of some good US employment data and the minutes of the US Federal Reserve’s December policy meeting.

At 0700 AEDT on Thursday, the local unit was trading at 89.07 US cents, down from 89.25 cents on Wednesday.

Since 1700 AEDT on Wednesday, the Australian dollar traded between 88.97 US cents and 89.53 cents.

A report from payrolls firm ADP showed that US private-sector job growth surged in December, topping November for the strongest pace of the year with 238,000 jobs added.

Early on Thursday morning the minutes of the US Federal Reserve December policy meeting showed that most members were optimistic about the US economic recovery.

At the December meeting the Fed decided to taper its bond purchases by $US10 billion to $US75 billion a month starting in January.

OM Financial senior client adviser Stuart Ive said the Australian dollar fell as the greenback strengthened against most of the major currencies.

“The first downward move came after the ADP employment data from the US, that data was a lot stronger than expected,” he said.

“It raises expectation that the Fed is going to continue cutting back on the economic stimulus.

“There was a bit of a fall as the US dollar strengthened, then equally we had another bit of a fall after the Fed minutes were released.

“They showed a bit more of an upbeat outlook from the Fed, that the economy is still marching along.

“I think we’re looking at a stronger US dollar overall, it’s not really an Australian dollar story today.”

In Australia on Thursday the Australian Bureau of Statistics will release retail spending figures and building approvals data, both for November.

Ive said markets will be particularly focused on the retail data.

He expects the Australian dollar to trade in a range between 88.90 US cents and 89.40 cents on Thursday.



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