Dollar higher on US data

THE Australian dollar has risen on strong US employment data.

THE Australian dollar has risen on strong US employment data.

At 12pm AEDT today, the dollar was trading at 104.00 US cents, up from 103.73 cents at yesterday's close.

Commonwealth Bank currency strategist Joseph Capurso said strong employment numbers in the US had boosted the Aussie dollar.

"That's what has been pushing up overnight and early this morning," he said.

US jobless claims were at their weakest level in three weeks, while the ADP employment report showed an increase of 158,000 jobs added to the private sector in October.

Mr Capurso said producer price index data - which measures the cost of goods at the factory gate - had softened the dollar slightly this morning.

"It had a slight fall later on, because PPI data came out a bit weaker than expected," he said.

Australia's PPI at the final stage of production rose 0.6 per cent in the September quarter, lower than the expected 1.0 per cent.

Mr Capurso said US non farm payrolls data due for release tonight, and a rate decision by the Reserve Bank of Australia (RBA) on November 6, would be the next focal points for the market.

"If the payrolls number isn't as good as the ADP report, the Aussie might fall a little bit, but not by a great deal," he said. "And the market's now predicting a 50-50 chance of a rate cut on Tuesday."

At its previous meeting on October 2, the RBA cut the cash rate by a quarter of a percentage point, to 3.25 per cent.
 
Meanwhile, Australian bond prices were lower at noon. At 12pm AEDT today, the December 10-year bond futures contract was trading at 96.920 (implying a yield of 3.080 per cent), down from 96.955 (3.045 per cent). The December three-year bond futures contract was at 97.430 (2.570 per cent), down from 97.470 (2.530 per cent).