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Dollar eases on overseas tensions

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The Australian dollar has retreated slightly from yesterday’s bouyant response to domestic jobs growth.

The dollar is lower as escalating tensions between Russia and the West overshadow positive economic data from the US and Australia.

Early Friday the local unit was trading at 90.26 US cents, down from 90.51 cents on Thursday.

Russia has put more troops near the Ukrainian border, ahead of a referendum on Sunday on the Crimea region becoming part of Russia.

The US and the European Union have threatened fresh sanctions if the vote is allowed to go ahead.

OM Financial senior client adviser Stuart Ive said the developments had caused traders to move away from riskier investments.

“We’re back into the whole risk-aversion scenario again,” he said.

“The US and EU view the vote as illegal but, nonetheless, it’s taking place.

“That’s got markets very twitchy. We saw the stock markets come off fairly quickly, this is despite slightly better-than-expected US data.”

Earlier in overnight trade, the Australian dollar hit a one-week high of 91.05 US cents after US retail spending figures for February and weekly jobless claims figures were both better than expected.

It rose almost half of a US cent late Thursday after the release of surprisingly strong jobs figures and hit an intra-day high of 90.82 US cents.

The unemployment rate stayed steady at 6.0 per cent in February, but the total number of people with jobs rose by 47,300, much more than economists had forecast.

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