Dollar edges back in late trade

Further rises are eyed this week for the Aussie after strong US jobs data failed to boost the greenback.

The Australian dollar was slightly lower in late trade on Monday, as investors took profit after a strong session for the local unit.

It came as strong employment growth in the US failed to give the US dollar fresh momentum.

In June, US nonfarm payrolls increased by 287,000, well ahead of consensus expectations for a 180,000 gain. The big jump in June payrolls didn’t meaningfully change the markets’ expectation of the next US rate increase, which is also being influenced by global volatility triggered by the UK’s vote to leave the European Union.

The market now sees a 24 per cent chance of a Federal Reserve rate rise by the end of this year, up from 19 per cent before the jobs data came out.

At 5.30pm (AEST), the Australian dollar was trading at US75.42 cents, compared with US75.60c late on Friday.

The Australian dollar can move higher this week, said CBA currency strategist Elias Haddad. He sees a shift toward US77c over the week, saying the prospect of more accommodative monetary policy stances from major central banks and reasonable global economic activity should be supportive.

Still, potential for gains will be somewhat limited longer term because the Reserve Bank of Australia is expected to cut interest rates by 0.5 per cent in the second half of this year, he added.

Ray Attrill, who heads currency strategy at National Australia Bank, said that given the failure of Friday’s US payroll headline to provide support for the US dollar, and with risk appetite close to year-to-date highs, it will take some negative news locally to prevent the Australian dollar from rising this week.

- Dow Jones newswires