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$A weighed down by weak jobs data

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Published on: Friday, January 17, 2014

by AAP

The Australian dollar is struggling to claw back its losses after a weak employment report saw the currency fall to a three-and-a-half-year low.

At 1200 AEDT on Friday, the Australian dollar was trading at 88.20 US cents, up from 88.14 cents on Thursday.

The Australian dollar dipped as low as 87.77 US cents overnight - its lowest point since July 2010 - after December labour force figures showed the economy lost 68,000 full-time jobs in 2013.

The monthly unemployment rate remained steady at 5.8 per cent, but only because the participation rate - the proportion of the population with a job, looking for one or who are ready to start work - fell to 64.6 per cent.

"The Aussie has found it hard to claim back lost territory on the back of the poor employment result yesterday which really took the wind out of the sails for the Aussie dollar," Easy Forex senior dealer Francisco Solar said.

"We've been hearing a lot of market reports and a lot of analysts coming out talking about whether we've seen the last rate cut from the Reserve Bank of Australia and whether the next move is going to be a rate hike.

"On the back of yesterday's number, a rate cut is definitely back on the table and that does weaken the Aussie, especially against the US dollar.

"The US are actually talking about tapering and possibly increasing rates next year - monetary policy is poles apart between the two currencies and that's really hurting the Aussie."

Meanwhile, Australian bond futures prices were higher.

At 1200 AEDT on Friday, the March 2014 10-year bond futures contract was trading at 95.930 (implying a yield of 4.070 per cent), up from 95.875 (4.125 per cent) on Thursday.

The March 2014 three-year bond futures contract was at 97.100 (2.900 per cent), up from 97.060 (2.940 per cent).


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