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Dollar holds above 90

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The Australian dollar continues to rally on the back of weaker-than-expected US jobs figures.

Early Tuesday, the Australian dollar was trading at 90.59 US cents, up from 90.28 cents on Monday.

The US non-farm payrolls report, released on Saturday morning, Australian time, showed that employers added 74,000 jobs in December, less than half the 197,000 jobs analysts had expected.

The disappointing figures have seen the Australian dollar rally more than one US cent against a weaker greenback.

BK Asset Management managing director Boris Schlossberg said the “shockingly low” figure had left investors more cautious.

“Although most analysts view the downward surprise as a one-off event and the broad consensus continues to believe that US growth will outperform this year, the large miss in the payrolls introduced a note of caution to the market that was unabashedly bullish US dollars as the year began,” he said.

“With the US Federal Reserve having now become very data dependent, the currency market will likely follow suit and the greenback may move in fits and starts as it reacts to every major news release on the economic calendar.

“The Aussie, meanwhile, appears to be benefiting from a bout of short covering both against the greenback and on the crosses.”

Schlossberg said the Australian dollar could extend its gains on Tuesday, possibly reaching 91 US cents.

 

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