Dollar higher after weak jobs data

THE Australian dollar closed slightly higher after briefly dipping below parity following surprisingly weak unemployment figures.

THE Australian dollar closed slightly higher after briefly dipping below parity following surprisingly weak unemployment figures.

At 5pm (AEDT) on Thursday, the Australian dollar was trading at 100.44 US cents, slightly higher than Wednesday's close of 100.39 cents.

Since 7am (AEDT) on Thursday, the local unit traded between 98.89 US cents and 100.90 US cents.

At 11.30am (AEDT), the local unit was at 100.91 US cents before falling to below parity with the US dollar after the release of disappointing employment data from the Australian Bureau of Statistics (ABS) at 11.30am (AEDT).

The ABS said the unemployment rate for October was 5.4 per cent, much higher than market expectations of between 5.0 and 5.1 per cent.

During the same period the participation rate rose to an all-time record 65.9 per cent, from 65.6 per cent the previous month.

Commonwealth Bank currency strategist Joe Capurso said the local unit recovered fairly quickly after the employment numbers.

"It was a volatile day for about five minutes and there hasn't been too much action apart from that.

"By about lunchtime, it started to recover quite consistently."

Mr Capurso said US the market would now await US retail sales data for October due on Monday and US industrial production figures on Tuesday.

"Overall, I think there's a fair bit of support for the Aussie, I think it can track a little bit under parity next week.

"I think the US economy is starting to turn around and we'll see that in the retail sales and the US industrial numbers next week.

"Volatility is back to normal, so I think you're going to get a bit of a recovery in the US dollar against all currencies, not just the Aussie dollar."

"In the month before the US Federal Reserve meeting the US dollar was just a one-way bet, it just kept going down against all currencies and it actually saw the Aussie go through the roof," Mr Capurso said.

"But I think the tide is starting to turn at least over the next couple of weeks, when the US dollar makes up a bit of a recovery."

Other key economic events next week include the release on Tuesday of the minutes of November's Reserve Bank of Australia board meeting US inflation data on Wednesday night (AEDT) and a speech by RBA deputy governor Ric Battellino on Thursday.