Dollar higher after reversing losses

THE dollar has rallied half a US cent overnight, reversing earlier losses after investors re-assessed local jobs data and the US political situation.

The Australian dollar dipped below US94 cents yesterday. (AAP Image/Julian Smith)

THE Australian dollar has rallied half a US cent overnight, reversing earlier losses after investors re-assessed local jobs data and the US political situation.

At 7am AEDT today, the local unit was trading at 94.63 US cents, up from 94.08 cents yesterday.

The Australian dollar dipped below 94 US cents yesterday after closer examination of better-than-expected jobs data had investors rethinking their initial positive reaction to the figures, said ANZ senior manager FX in Auckland Sam Tuck.

"Adding to that as well was that there was some general excitement that the Republicans were starting to cave, which would lead to US dollar strength," he said.

"But, then, the markets decided late in the evening that that was the wrong reaction.

"You should see some Aussie dollar strength, just due to the fact that we've got a new dovish US Federal Reserve nomination with Janet Yellen, US jobless claims last night were weaker than expected and there will have been some dent to confidence in the US from the government shutdown so far."

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