THE Australian dollar was trading close to one US cent lower at noon, following weaker than expected local jobs data.
At 12.00pm (AEST) today, the dollar was trading at 105.82 US cents, down from 106.69 cents yesterday.
Since 7.00am (AEST) the local unit traded between 105.76 US cents and 106.64 US cents
The local currency had reached 110.11 US cents on May 3, a record high since the currency was floated in December 1983.
Today's official figures showed Australia's jobless rate had stayed at a two-year low 4.9 per cent in May for the third month in a row.
However, total employment rose by a seasonally adjusted 7800 to 11.441 million in the month, whereas economists had tipped it to rise by 23,500.
The dollar shed half a US cent almost immediately after the data was released, perhaps due to expectations the central bank's next cash rate hike could be further away than previously forecast.
ICAP senior economist Adam Carr said the currency market was showing confusion over the position of the Reserve Bank (RBA) regarding future cash rate rises.
"Anything which isn't strong is perceived as being weakening the chances of a rate hike," he said.
"That may end up being the case, but until we find out ... what (the RBA's) view actually is, we don't know."
At the beginning of this week, the futures market gave the chances of a rate hike by the end of August an even chance.
Following the RBA's decision to keep rates on hold on Tuesday, the market is now pricing in less than a 50 per cent chance for a hike by the end of this year.
Mr Carr expects today's employment figures to add to the case for a rate hike, considering the jobless rate is still at 4.9 per cent - below the five per cent level many economists believe adds to wage-related inflationary pressures.
He expects the dollar to trade back over 106 US cents for the remainder of the domestic session.
Source By: news.com.au/
For Further Reading,