Australian dollar has fallen on US jobs data

THE Australian dollar has fallen to a new three-month low after US employment growth figures came in much stronger than expected.

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THE Australian dollar has fallen to a new three-month low after US employment growth figures came in much stronger than expected.

At 0700 AEDT on Monday, the local unit was trading at 69.65 US cents, down from 70.51 cents on Friday.

Over the weekend, it fell as low as 69.51 US cents, its weakest level since September 29.

The US economy created 292,000 jobs in December, easily beating forecasts of a rise of 200,000, and the unemployment rate held steady at a seven-and-a-half-year low of five per cent.

OM Financial senior client adviser Stuart Ive said the data indicated the US economy was still strengthening, leaving the door open for the US Federal Reserve to raise its interest rate again. “Non-farm payrolls exceeded expectations so that added to some US dollar strength, pushing the Australian dollar a little bit further to the downside,” he said.

Mr Ive said the figures also showed flat wages growth for the month which makes a US Federal Reserve rise this quarter less likely, and limited the Australian dollar’s fall.

“That wage price inflation is one of the things we’re looking for to confirm that the Fed will raise its interest rate by 25 basis points a quarter, but if that inflationary pressure is non-existent then they may hold back on hiking,” Mr Ive said.

CURRENCY SNAPSHOT AT 0700 AEDT ON MONDAY

One Australian dollar buys:

* 69.65 US cents, from 70.51 cents on Friday

* 81.67 Japanese yen, from 83.42 yen

* 63.77 euro cents, from 64.82 euro cents

* 106.17 New Zealand cents, from 106.07 NZ cents

* 47.95 British pence, from 48.24 pence

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

Source: IRESS