Dollar holds on to gains from jobs data

THE dollar is slightly lower after trading in a narrow range overnight.

Australian currency

THE dollar is a touch lower but has held on to gains made in the wake of yesterday's key jobs data.

At 12pm AEDT today, the currency was trading at 102.68 US cents, down slightly from 102.72 US cents. Since 7am AEDT, it has traded in a tight range of between 102.49 and 102.84 US cents.

ANZ foreign exchange strategist Andrew Salter said the dollar rallied yesterday in the wake of local jobs data which showed total employment rose by 14,500 in September, even though the unemployment rate rose to 5.4 per cent, from 5.1 per cent in August.

He said the currency received further support overnight from a weekly US jobless report showing the number of people applying for unemployment benefits had fallen to its lowest level since February 2008.

Mr Salter said the dollar had edged higher since Monday after losing more than three US cents in the previous seven days.

"There's been positive signs out of China with infrastructure announcements being announced or brought forward and there has been constructive indications on monetary policy from the central bank," he said. "So, there is a positive international backdrop for the Aussie."

Mr Salter said the key event for the dollar over the weekend would be the release of Chinese trade figures tomorrow.

Meanwhile, Australian bond futures prices were lower at noon. At 12pm AEDT today, the December 10-year bond futures were trading at 97.055 (2.945 per cent), down from 97.065 (2.935 per cent) yesterday. The December three-year bond futures contract was at 97.620 (2.380 per cent), down from 97.640 (2.360 per cent).