Dollar gains ground

 

Australian, dollar, notes, moneyThe Australian dollar is higher on the back of surprisingly weak US employment figures.

At 0700 AEST on Monday, the local currency was trading at 93.65 US cents, up from 93.51 cents on Friday.

US employers added just 142,000 jobs in August, snapping a six month streak of hiring above 200,000 and posting the smallest gain in eight months.

The participation rate – those that have a job, are looking for work or are ready to start work – dropped to its lowest level since 1978, BK Asset Management MD, Kathy Lien, said.

The weaker figures put the greenback under pressure, although the US currency did maintain its resilience, Lien said.

“Friday’s surprisingly weak non-farm payrolls report triggered a pullback in the currency but in light of its strong rally last week, the decline was extremely modest,” Lien said.

“Payroll growth missed expectations by an eye popping 88,000 and the magnitude of the miss should have triggered a more significant sell off in the greenback.

“One month of weak job growth does not make a trend especially since the August report can be volatile and subject to revision.

“For these reasons, we do not believe that the slowdown in job growth will kill the US dollar rally.”

AAP

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