Saturday, July 13, 2013

Australian dollar retreats from US93c in late trade

AAP, with a staff reporter

The Australian dollar pared gains at the local in a day of volatile trade after flirted with US 93 cents after a fall in the greenback, and a jump in the local jobless rate rose to the highest level since September 2009.

At 1700 AEST on Thursday, the local unit was buying 92.66 US cents, up from 91.96 cents on Wednesday. It earlier touched an intra-day high of 93.08 US cents.

The Australian dollar rallied on Thursday after US Fed chairman Ben Bernanke said the Fed's economic stimulus program was still necessary, because the jobs market remained weak and inflation remained too low.

ForexCT head of research Steven Dooley said the comments led to a massive fall in the US dollar.

"Ben Bernanke's question-and-answer this morning was almost a complete contradiction of all the information we've been getting from the Federal Reserve over the last six months," Mr Dooley said.

"There's been a complete and utter turn around in sentiment not just towards the Aussie dollar but all currencies compared to the US dollar."

Mr Dooley said the Australian dollar also rallied on the back of weaker than expected jobs figures on Thursday, because the market initially misinterpreted the data.

He said the local currency rallied on news that 10,300 jobs had been created in June, until it became apparent that the unemployment rate had hit its highest point in almost four years at 5.7 per cent.

"It was a funny reaction to the labour figures because on first blush, they looked better than expected," Mr Dooley said.

"Overall, once the market had time to digest the numbers it was pretty much the case that it had no real net effect and the Aussie dollar just continued to drift higher."

CMC Markets sales trader Betty Lam said, "looking ahead, the dollar's fate will be at the mercy of US unemployment and import data due overnight".

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