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Aussie dollar slides on strong U.S. employment figures

Xinhua, January 11, 2016 Adjust font size:

The Australian dollar came under pressure in Friday's offshore trade as strong U.S. employment growth figures strengthened the greenback.

At 0700 AEDT on Monday, the local unit was trading at 69.65 US cents, down from 70.51 cents at Friday's Asian close. The Aussie unit fell as low as 69.51 U.S. cents, the weakest level since late September in offshore trade.

U.S. economic data released in Friday's offshore session showed the job creation was increased in December, higher than market expectations while maintaining record low unemployment levels at 5 percent.

OM Financial senior client adviser Stuart Ive told local media the data indicates the U.S. economy was still strengthening, leaving the door open to further U.S. Federal Reserve rate hikes.

"Non-farm payrolls exceeded expectations so that added to some U.S. dollar strength, pushing the Australian dollar a little bit further to the downside," Ive said.

National Australia Bank global co-head of FX strategy Ray Attrill however said gains in the U.S. dollar -- and therefore falls in the Aussie unit -- were limited with market reaction concerned of a stronger U.S. dollar-CNY causing blow-back in the form of weaker emerging market equities, risking markets more generally.

"On another day, news of a near 300k rise in U.S. payrolls, still quite benign earnings growth and a steady but near-full employment unemployment rate (5.0 percent), might have sent equities and the dollar to the moon," Attrill said in his morning note.

At 0940 local time, the Australian dollar was trading at 69.38 U.S. cents. Endit