Dollar higher on US job figures

THE Australian dollar is more than half a US cent higher, following optimistic job figures from the US.

Dollar

THE Australian dollar is more than half a US cent higher, following optimistic job figures from the US.

At 17.00 AEST on Monday, the local unit was trading at 105.60 US cents, up from 104.95 cents on Friday.
IG Markets market strategist Stan Shamu said the local currency had responsed well to the release of strong US non-farm payrolls data.

"The Australian dollar had a big run on Friday night on the back of a rally in risk assets after a better-than-expected reading in the US payrolls number," he said.

"We also had a lift in sentiment following comments from Spain's prime minister who said he would consider a bailout - that appeased investors a little bit."

Friday's non-farm payrolls data showed that 163,000 jobs were added to the US economy in July compared to an expectation of 100,000.

Mr Shamu said the higher demand for risk assets had continued on Monday morning, but softened as they day progressed.

"Unfortunately for the Aussie dollar, it didn't quite keep that run going," he said.

"It's relatively flat compared to Friday's position, and there's a bit of caution as well ahead of the RBA (Reserve Bank of Australia) decision."

The RBA meets on Tuesday for its monthly rate decision - and is expected to keep the cash rate on-hold at 3.5 per cent.

Mr Shamu said the market would be mainly interested in the statement accompanying the decision.