Dollar slightly lower ahead of US jobs data

THE Australian dollar was slightly lower, trading in a tight range during the local session as traders await the release of US jobs figures tonight (AEST).

THE Australian dollar was slightly lower, trading in a tight range during the local session as traders await the release of US jobs figures on Friday night (AEST).

At 17:00 AEST, the Australian dollar was trading at 106.94 US cents, down from 107.23 cents on Thursday.

Since 7:00 (AEST), the local unit traded between 106.88 US cents and 107.34 cents.

Commonwealth Bank currency strategist Joseph Capurso said currency markets were quiet on Friday.

He said the Australian dollar fell after a New York Times story said the US government is going to sue more than 12 large banks for misrepresenting quality of mortgage securities.

"It did have a bit of a move down earlier in the day that was in response to news the US government may be suing some of the big banks," Mr Capurso said.

That saw the US dollar rise against a lot of currencies.

"Other than that, it's just been in a fairly tight trading range."

The market is now awaiting the release of US non-farm payrolls for August, due out on Friday night (AEST), the official measure of the US employment growth.

The market is forecasting 95,000 jobs to be added to the US economy in August.

CMC Markets senior FX dealer Tim Waterer said he expected the employment figures to move currency markets.

"Risk assets will either get the green light or the red light when US non-farm payrolls are released," he said.

"A print of sub-50,000 jobs would definitely put the heat on higher yielding currencies, which would be sold off in favour of the yen and Swiss franc."

Mr Waterer said the Australian dollar could hit 108 US cents by the weekend, if the US payrolls boosted market optimism.

The RBA's trade weighted index was at 76.7, up from 76.6 on Thursday.