The Australian dollar is lower on expectations that the unemployment rate will edge higher and amid increased expectations that tapering of US economic stimulus will begin soon.

At 0700 AEDT on Thursday, the local unit was trading at 90.64 US cents, down from 91.31 cents on Wednesday.

“We’ve seen a tremendous amount of weakness in the Australian dollar today,” BK Asset Management MD Kathy Lien said from New York.

“All of this uncertainty (around tapering) is leading to profit taking across the financial markets and the Australian dollar.”

Lien said expectations of weak local jobs figures on Thursday, along with a decline in US stocks, had hit the Australian dollar.

“The Australian dollar has been hit the hardest by the decline in US stocks,” Lien said.

“We’re also seeing a bit of liquidation ahead of the employment report and all of that is contributing to the sell-off in the currency.”

AAP