Dollar edges back in late trade

The local unit was swapping hands below US75.5c in late trade, as jobs disappointment weighed.

Morgan Stanley said the mixed employment data would be on the radar of the central bank.

The Australian dollar was lower in late trade on Thursday, following news the economy created fewer jobs than expected in August.

At 5.30pm (AEST), the Australian dollar was trading at US74.58 cents, down from US74.69c at the same time on Wednesday.

The seasonally-adjusted unemployment rate fell to 5.6 per cent in August, from 5.7 per cent in July, and well below levels of above 6.0 per cent a year ago, the government statistician said.

Still, the fall in the unemployment rate came despite a loss of nearly 4,000 jobs in August. Economists expected a rise in employment of 15,000.

The underemployment rate reached a record high of 8.7 per cent, during the month, suggesting a lot of slack remains present in the job market, economists said.

Daniel Blake, economist at Morgan Stanley said the mixed employment data would be on the radar of the central bank, but wasn’t enough to trigger a rate cut in the near term.

“While today’s labor market data was soft on balance, we would not expect the RBA’s outlook to be shifted, and expect the cash rate to be held at 1.50 per cent through the remainder of 2016,” he said.

Earlier this week, Chris Kent, Assistant Governor at the Reserve Bank of Australia, gave an upbeat view of the economic outlook. Mr Blake said it reflected a more upbeat position of the central bank.

“Kent’s speech this week struck an upbeat tone on the growth transition...while the Australian dollar was a little higher than they would expect, there was no hint of policy concern,” Mr Blake added.

Dow Jones