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$A still firm despite RBA testimony

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Published on: Friday, March 07, 2014

by AAP

The Australian dollar continues to perform strongly ahead of widely anticipated weak US jobs data.

At 1200 AEDT on Friday, the local unit was trading at 90.82 US cents, up from 90.12 cents on Thursday.

The Aussie dollar reached an intraday high of 91.11 cents during early morning trade before shedding some gains shortly after Reserve Bank of Australia governor Glenn Stevens' address to a federal parliamentary committee in Sydney on Friday morning.

Mr Stevens' comment about the local currency being too high if its in the 90s or more than a dollar caused some selling, IG chief market strategist Chris Weston said.

"The Aussie has fallen since the speech, pulling back slightly. There was always speculation he would talk the Aussie down," he said.

"However, he hasn't said anything dramatic or anything that has surprised anyone and I suspect the Aussie will pick up again with some positioning ahead of the (release of) US non-farm payrolls."

OZForex chief currency strategist Jim Vrondas agreed that the Aussie had room to climb on speculation the US jobs data, due out tonight, Australian time, will be weak.

"The market is expecting US non-farm payrolls data to be softer," he said.

"The Aussie dollar can go higher and it won't be surprising if it pushes towards 92 cents based on the payroll data, before it starts to decline again next week."

The local currency has been performing strongly after a string of positive economic data, including Thursday's surprisingly strong retail sales figures and a large rise in the trade surplus.

Meanwhile, the Australian bond futures prices are weaker on growing risk appetite as the prospect of a full military conflict between Russia and Ukraine looks less likely.

At 1200 AEDT on Friday, the March 2014 10-year bond futures contract was trading at 95.885 (implying a yield of 4.115 per cent), down from 95.950 (4.050 per cent) on Thursday.

The March 2014 three-year bond futures contract was at 96.980 (3.020 per cent), down from 97.030 (2.970 per cent).


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