Dollar eyes US75c level

The local unit was lower in late trade, as the market looked ahead to US employment figures.

The Aussie plumbed the US75.00 support level in Asian trade.

The Australian dollar was lower in late trade on Wednesday, as the US dollar gathered support ahead of a US employment report Friday.

A strong US payrolls result would fuel talk of a US interest rate increase this year, perhaps as early as September.

The US currency is trading at its highest level in three weeks. Higher rates make dollar-denominated assets more attractive.

The Aussie plumbed the US75.00 support level in Asia, said Stephen Innes, senior currency trader at OANDA Australia and Asia Pacific. “Repricing of September rate-increase probabilities in the US is definitely causing discomfort to long Aussie positions,” he said.

A US rate increase is likely a certainty, he added. “What needs to be ironed out is whether the next interest rate move is a one and done deal or a return to the path of interest rate normalisation,” he added.

US monetary policy remains in sharp focus for investors. Last week, Fed Chairwoman Janet Yellen and Vice Chairman Stanley Fischer said the economy was resilient enough to withstand an interest-rate rise this year.

At 5.54pm (AEST), the Australian dollar was at US75.09c, unchanged from the same time on Tuesday.

On Thursday, the Australian government statistician will report business investment data for the second quarter. Business investment has been a drag on the economy for some years as a record mining investment boom retreats.

“Markets are likely to place less importance on this release, believing the central bank’s near-term outlook for rates is now more tied to the inflation outlook and to developments in the labor market,” said Tapas Strickland, an economist at National Australia Bank.