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Aussie dollar treading water as jobs data looms

Xinhua, July 14, 2016 Adjust font size:

The Australian dollar is in a wait and see mode as market participants eye key local jobs data after finding support from Chinese trade data in the offshore session.

At the Asian open on Thursday, the local unit was trading at 76.07 U.S. cents, up from 75.92 U.S. cents at Wednesday's close, though had eased further to 75.94 U.S. cents by 0959 local time (AEST).

A slight ease in the greenback following the release of the U.S. Federal Reserve's Beige Book overnight and strong Chinese iron ore import data supported the Australian dollar overnight, but it was not enough to send the unit in the mid 76 U.S. cent region.

Traders are eyeing key employment data to be released mid session, with some market participants expecting the numbers to come in below consensus due to sample rotation.

"Softer Australian employment conditions, as we expect, can weigh on the Australian dollar today because it will reinforce the case for more Reserve Bank of Australia rate cuts," Commonwealth Bank of Australia senior currency strategist Elias Haddad said.

"Still, the downside will be limited."

The prospect of more accommodative policy and fiscal stimulus from major central banks and economies is supportive of the Australian dollar and there is also strong technical support for the unit at 75.50 U.S. cents, Haddad said. Endit