Dollar lower as US economic data improves

THE Australian dollar is lower against the US dollar, which is surging on the back of better economic data.

THE Australian dollar is lower against the US dollar, which is surging on the back of better economic data.

At 12pm AEDT today, the local unit was trading at 102.27 US cents, down from 102.84 cents yesterday.

Last night, Australian time, payrolls firm ADP said the US private sector added about 198,000 new jobs in February, which was better than expected.

Easy Forex senior dealer Francisco Solar said economic data may mean the US Federal Reserve could end an economic stimulus program called quantitative easing earlier than expected.

QE has dampened the value of the US dollar and is a major factor why the Australian dollar is above parity with its American counterpart.

"There seems to be a shift in thinking as far as the US dollar is concerned in the sense the that strong US data means strong US dollar," Mr Solar said. "People are repatriating funds thinking the American economy is looking pretty good to invest in at the moment."

"The ADP report came in better than expected, maybe giving a clue to where non-farm payrolls will come at tomorrow night."

Early Saturday morning (Australian time), the US will release its official measure of employment data, called non-farm payrolls.

Mr Solar said he expected the Australian dollar to trade in a range between 101.80 US cents and 102.60 cents this afternoon.

Meanwhile, Australian bond futures prices were lower at noon. At 12pm AEDT today, the March 10-year bond futures contract was trading at 96.605 (implying a yield of 3.395 per cent), down from 96.625 (3.375 per cent) yesterday. The March three-year bond futures contract was steady at 97.160 (2.840 per cent). The March 90-day bank bill futures contract, expired at midday, finishing at 96.990 (3.010 per cent), down from 97.010 (2.990 per cent).