Dollar stronger on positive jobs data

THE dollar was trading US0.5c higher at noon on positive employment figures.

THE dollar was trading US0.5c higher at noon on positive employment figures.

At midday (AEDT), the local unit was trading at US98.40c, up from yesterday's close of US97.89c.

At 11.30am, the Australian Bureau of Statistics reported that 54,600 new jobs in November, when the market forecast was for an increase of 20,000.

Shortly after the data was released, the dollar rose US0.5c.

ICAP senior economist Adam Carr said the figures helped raise confidence in the economy.

He says the positive data may prompt the Reserve Bank of Australia (RBA) to raise the cash rate in the first quarter of 2011.

"The RBA gave a fairly neutral signal to us when they met (on Tuesday) and this data today shows why the RBA's pause isn't going to be that long," Mr Carr said.

"The chances of them being on hold until June next year is, I think, effectively zero."

Since 7am, the local unit traded in a range between US97.76c and US98.55c.

Mr Carr expected the local unit to stay above US98c for the rest of the trading day.

Meanwhile, the bond market was flat.

At noon on the ASX 24, the December 10-year bond futures contract was at 94.370 (implying a yield of 5.630 per cent), unchanged from yesterday's close.

The December three-year bond futures contract was at 94.880 (5.120 per cent), down from 94.920 (5.080 per cent).