Dollar dips after weak jobs data

THE Australian dollar fell half a US cent after the release of some very disappointing employment data but has since recovered as the market focuses on the European financial crisis.

THE Australian dollar fell half a US cent after the release of some very disappointing employment data but has since recovered as the market focuses on the European financial crisis.

Unemployment in Australia rose to 5.3 per cent in November from 5.2 per cent in October, the Australian Bureau of Statistics said today.

Total employment fell 6,300 in the month, significantly weaker than market forecasts for a rise in employment of 10,000 jobs in November.

Easy Forex senior dealer Francisco Solar said it was not a surprise the Australian dollar fell after the release of the weak jobs data.

"The unemployment disappointed a little bit and the employment numbers disappointed a whole lot," he said.

The local unit fell to an intraday low of 102.29 US cents.

By 5pm (AEDT) the Australian dollar was trading at 102.64 US cents, slightly down from 102.68 cents yesterday afternoon.

Mr Solar said the market was focused on the eurozone government debt crisis and it was more of a driver for the Australian dollar.

"So as quickly as it dropped the market took a reality check and realised what's going to happen tonight with the ECB and the EU meeting has a bit more of a bearing," he said.

Tonight, Australian time, the European Central Bank and the Bank of England are due to release their respective interest rate decisions, with the market expecting both central banks to take action to stimulate their economies.

A summit of European Union leaders will be held in Brussels on Thursday and Friday, with the debt crisis and saving the euro the main items on the agenda.

"There's a lot of emphasis being placed on this meeting and it would have to come with something quite substantial and quite large," Mr Solar said.

"If the European meeting falls short of expectations then the market may actually punish currencies like the Aussie and the euro."

The Reserve Bank of Australia's trade weighted index was at 76.0 today, which was where it was yesterday.