Dollar wilts on solid US job figures
THE Australian dollar has sagged in the face of strong US job figures that have boosted the prospect of an American interest rate rise this month.
The Aussie drifted as low as US68.92¢ in early morning trade before recovering some ground to hover around US69.23¢ late yesterday.
The US added 173,000 jobs in August, which was below previous months but enough to send its unemployment rate down to 5.1 per cent, its lowest since early 2008. Westpac senior currency strategist Sean Callow said fair value for the Aussie was about US72¢, once the impact of a stabilising iron ore price, now about $US56 a tonne, is factored in.
He said the currency had been knocked about by share market volatility and weakness in its Asian counterparts, including the Malaysian ringgit and Korean won. The Aussie dollar was also reacting fiercely to every shred of data that edged America closer to “lift-off” from its virtually zero cash rate, he said.
China will also release important trade and inflation numbers this week. It will hope they go down better than its poor August manufacturing figures, which raised concerns over the extent of the Chinese economic slowdown.