Aussie dollar loses its steam

THE Aussie dollar has traded in a narrow range after falling to a three-month low following on US unemployment figures.

Aus dollar rises

THE Aussie dollar has traded in a narrow range after falling to a three-month low following on news US unemployment hit its lowest level in almost four years.

At 12.00 AEDT on Monday, the currency was trading at 101.73 US cents, down from 102.51 US cents on Friday.

Earlier, the currency hit a three-month low of 101.52 US cents.

ForexCT head of research Steven Dooley said the Australian dollar fell after US non-farm payrolls data, released on Friday night, showed the national unemployment rate fell to 7.8 per cent in September, from 8.1 per cent in August.

It is the first time the unemployment rate has fallen below eight per cent since January 2009.

Mr Dooley said the jobs figures were seen as a negative for the Australian dollar because they increased the likelihood the US Federal Reserve would abandon its latest round of quantitative easing.

"People are now starting to think, what will make the Fed turn off the taps?" he said.

"As US unemployment gets back towards seven per cent you expect to see some of the steam come out of the Aussie."

Mr Dooley said it was likely the Australian dollar would continue to move lower during the week, with the release of official Australian jobs figures on Thursday the main driver for the currency.

He said the currency could move as low as 97 US cents over the next few weeks.

Meanwhile, Australian 10-year bond futures prices were lower at noon.

At 12.00 AEDT on Monday, the December 10-year bond futures contract was trading at 97.035 (implying a yield of 2.965 per cent), down from 97.055 (2.945 per cent).

The December three-year bond futures contract was at 97.640 (2.360 per cent), up from 97.630 (2.370 per cent).