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Dollar steady above 90c


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The Australian dollar is higher as the prospect of a stable interest rate outlook helps investors shrug off last week’s disappointing jobs figures.

Early Monday, the local unit was trading at 90.53 US cents, up from 89.92 cents on Friday.

The currency fell to 89.07 US cents on Thursday after it was reported that the unemployment rate in January had hit six per cent for the first time in over 10 years.

BK Asset Management managing director Kathy Lien on Monday said traders were looking ahead to Tuesday’s release of the Reserve Bank of Australia’s February board meeting minutes.

“The Australian and New Zealand dollars continued to rebound against the greenback in a way that suggests that investors have completely forgotten about last week’s ugly Australian jobs number,” she said.

“Market participants are clearly looking beyond this week’s release and hoping that the Reserve Bank of Australia’s decision to drop their easing bias means that brighter times lie ahead.”

After the RBA board meeting on February 4, governor Glenn Stevens said “the most prudent course is likely to be a period of stability in interest rates”.

Lien said the Australian dollar was one of the best performing currencies on Friday, along with New Zealand dollar and the British pound.

“The recent shifts in monetary policy by the Bank of England and Reserve Bank of Australia have been extremely positive for these currencies,” Lien said.

The Australian, UK and New Zealand central banks have all recently moved away from a stance where they expect to cut their respective interest rates.

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