Greenback hit by disappointing data

THE Australian dollar has risen solidly and is comfortably back above 74 US cents after a disappointing US jobs report hurt the greenback.

THE Australian dollar has risen solidly and is comfortably back above 74 US cents after a disappointing US jobs report hurt the greenback. At 0635 AEST on Monday, the Australian dollar was worth 72.24 US cents, up from 73.90 US cents on Friday.

Westpac’s Imdre Speizer said the US dollar index fell 0.5 per cent on Friday, while the Australian unit had risen from 73.75 to 74.47 US cents. The catalyst was the US jobs data.

“US non-farm payrolls rose by 138,000 in May (vs 182,000 expected), a weak reading accentuated by an outsized — 66,000 revision to the previous two months,” he said in a Monday morning note.

“The three-month average pace of jobs growth now sits at a meagre +121,000, down from +200,000k as recently as February, and the weakest pace since August 2012.”

The figures had prompted one Federal Reserve official to cut the second quarter gross domestic growth estimate from four per cent to three per cent. “This weaker update will not derail a 14 June Fed hike but it will certainly give those like Brainard who have started to fret about recent low inflation readings some added ammunition,” Mr Speizer said.

The local currency would reap some benefit on Monday, he said, “helped by Friday’s fall in the US dollar (jobs data response), and likely contained by 0.7400-0.7500”. The Australian dollar, however, is sharply lower against the yen, but hardly changed against the euro.

CURRENCY SNAPSHOT AT 0635 AEST ON MONDAY

One Australian dollar buys:

* 74.24 US cents, from 73.90 on Friday

* 81.92 Japanese yen, from 82.47 yen

* 65.86 euro cents, from 65.88 euro cents

(*Currency closes taken at 1700 AEST previous local session)

Originally published as Greenback hit by disappointing data