Dollar slides on greenback strength

US, money, dollarThe Australian dollar is slightly lower after the US dollar rallied on the back of strong US jobs data.

At 0700 AEST on Friday, the local unit was trading at 76.92 US cents, down from 76.99 cents on Thursday.

Earlier in the overnight session, the local currency peaked at a two week high of 77.40 US cents on the back of gains in commodity prices, but then succumbed to US dollar strength.

New claims for US unemployment insurance benefits rose again last week, which raised speculation the US Federal Reserve will increase its interest rate sooner rather than later.

BK Asset Management MD, Kathy Lien, said the data set off the rally in the greenback.

“Only 281,00 claims were filed the week ending April 4, extending the string of sub 300,000 prints, a trend that reinforces our positive outlook for the US labour market and hardens the Federal Reserve’s plans to raise interest rates,” she said.

“Slowly but surely, investors are reloading their long dollar bets, banking on a rate hike between June and September.”

Economic figures that are likely to affect the Australian dollar on Friday include the release of local housing finance figures and Chinese inflation data.

AAP

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