Dollar gains on jobs data

THE Australian dollar got a temporary boost from better-than-expected jobs data before its gains were crushed by US dollar strength.

Tapering of the Fed's stimulus would typically cause the US dollar to rise, and the Australian dollar to fall. (AAP Image/Julian Smith)

THE Australian dollar got a temporary boost from better-than-expected jobs data before its gains were crushed by US dollar strength.

At 12pm AEDT today, the local unit was trading at 94.48 US cents, up from 94.33 cents yesterday.

The Australian dollar reached 94.73 US cents after the unemployment rate for September fell to a four-month low of 5.6 per cent, beating economists' expectations of 5.8 per cent.

But the strong greenback gained the upper hand shortly after, boosted by news that Janet Yellen will head the US Federal Reserve, Easy Forex currency dealer Tony Darvall said.

"It's more US dollar strength than Aussie dollar weakness," Mr Darvall said.

"The US dollar strength seems to be coming on the back of the announcement about Yellen, creating a little less uncertainty on that front, even though she is a little bit of a dove."

Mr Darvall said the Australian dollar was holding up remarkably well in the face of recent US dollar strength and the uncertainty surrounding the US political stalemate.

"What we've had is more of a trend change with the Aussie," he said.

"A lot of banks are talking up the Aussie now, as the markets begin to discount any more Reserve Bank action."

The better-than-expected jobs data pushed Australian bond futures prices lower.

The December 10-year bond futures contract was trading at 95.935 (implying a yield of 4.065 per cent), down from 95.955 (4.045 per cent) yesterday.

The December three-year bond futures contract was at 96.890 (3.110 per cent), down from 96.930 (3.070 per cent).

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