Dollar recovers from big overnight fall

THE Australian dollar is higher after bargain-hunting traders rushed to buy the currency while it was still cheap.

Dollar recovers from big overnight fall

THE Australian dollar is higher after bargain-hunting traders rushed to buy the currency while it was still cheap.

The currency dropped to a 33-month low at 93.26 US cents last night after the Bank of Japan showed a reluctance to extend its asset purchase program.

At 12pm AEST today, the Australian dollar had recovered to 94.69 US cents, up from 94.02 cents yesterday.

CMC Markets sales trader Niall King said things were a little calmer for the currency on Wednesday after the volatile movements of the past 12 hours.

"It appears that bargain-hunting traders taking the 'oversold' view on the local unit have been behind last night's bounce

"The dollar has been tormented in recent weeks by continuing downward revisions of Chinese growth, a resurgent US dollar and a string of average domestic economic data pointing to further rate cuts by the Reserve Bank of Australia.

Mr King said Australian markets were awaiting tomorrow's release of local jobs figures for May.

Economists are expecting the unemployment rate to rise to 5.6 per cent, from 5.5 per cent the previous month and the number of people with jobs to fall by 10,000.

"Tomorrow's employment data could prove a critical checkpoint for the Australian economy and its ailing currency," Mr King said.

"Any sign of weakness here is bound to weigh heavily on the local dollar."

Meanwhile, Australian bond futures prices were lower at noon.

At 12pm AEST today, the June 10-year bond futures contract was trading at 96.525 (implying a yield of 3.475 per cent), down from 96.590 (3.410 per cent) yesterday.

The June three-year bond futures contract was at 97.365 (2.635 per cent), down from 97.435 (2.565 per cent).

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