Dollar up on US jobs, ECB plan

THE Australian dollar continues to trade strongly on weak US jobs figures and a plan by the European Central Bank (ECB) to support the region's weaker economies.

Australian dollar

THE Australian dollar continues to trade strongly on weak US jobs figures and a plan by the European Central Bank (ECB) to support the region's weaker economies.

At 12.00 AEST on Monday, the Australian dollar was trading at 103.72 US cents, up from 103.23 US cents on Friday.

RBC currency strategist Michael Turner said weak US non-farm payrolls figures provided stimulus for the Australian currency on Friday.

"The Aussie's been pretty well-supported since the employment data," he said.

The much-watched data showed that only 90,000 jobs were added to the US job market in August, compared to economists' predictions of 130,000.

Also supporting the Australian dollar was the announcement on Thursday (European time) that the ECB would buy bonds from weaker eurozone economies, thus providing financial support and helping to lower their borrowing costs.

Mr Turner said the local currency would likely remain above 103 US cents for the remainder of the week, although a meeting of the US Federal Open Market Committee (the FOMC, Federal Reserve's policy arm) would be influential for markets.

"The FOMC are likely to ease in some shape or form," he said.

The FOMC, which meets on Thursday and Friday, is expected to announce a fresh round of quantitative easing.

Meanwhile, Australian bond futures prices were higher at noon.

At 12.00 AEST on Monday, the September 10-year bond futures contract was trading at 96.960 (implying a yield of 3.040 per cent), up from 96.890 (implying a yield of 3.110 per cent) at Friday's close.

The September three-year bond futures contract was at 97.520 (2.480 per cent), up from 97.450 (2.550 per cent).