The Australian dollar remains just shy of 77 US cents but the share market has surrendered most of its early gains in the wake of disappointing jobs figures.
The local currency shot up more than one US cent to hit a three-week high of 77.19 US cents early on Thursday as the US dollar weakened because of comments made by the US Federal Reserve after it delivered an expected interest rate hike.
The Aussie had eased to 76.89 US cents by 1700 AEDT, but was up from 75.71 US cents at the close of local trade on Wednesday.
The greenback weakened as speculation of further US interest rate rises – on top of those already anticipated – was dampened by the Fed’s affirmation that it plans to increase interest rates gradually.
The Australian dollar eased slightly after the release of local labour force data, which showed an unexpected rise in the unemployment rate to 5.9 per cent.
“The Aussie dollar fed on the double whammy of a weak US dollar and the dovish Fed Reserve decision,” said AxiTrader chief market strategist Greg McKenna.
A surge in commodity prices overnight also helped the Australian dollar, he said.
The share market started the day well but surrendered ground following the release of the jobs data, which showed unemployment at its highest level in more than a year, a collapse in the number of hours worked, and the number of people wanting more work near a 20-year high.
“We were off to the races early today – up by half a per cent or so – but that was a shocker, really – the highest unemployment rate for some time,” CMC chief market strategist Michael McCarthy said.
The banks were the laggards, following a weak performance of financial stocks in the US, he said.
All four major banks were lower, with National Australian Bank falling the most, by 2.4 per cent.
Miners and energy producers rose on the back of stronger commodity prices.
BHP Billiton gained 3.7 per cent, Rio Tinto added 2.3 per cent and Origin Energy was 3.7 per cent higher.
Myer fell 5.3 per cent to $1.08 after reporting a five per cent rise in half year profit, but sluggish sales.
ON THE ASX:
* The benchmark S&P/ASX200 was up 11.8 points, or 0.2 per cent, at 5,785.8 points.
* The broader All Ordinaries index was up 13.8 points, or 0.24 per cent, at 5,827.5 points.
* The March SPI200 futures contract was down one point at 5,781 points.
* National turnover was 3.7 billion securities traded worth $9.3 billion.
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 76.89 US cents, from 75.71 US cents on Wednesday
* 87.11 Japanese yen, from 86.92 yen
* 71.68 euro cents, from 71.30 euro cents
* 62.68 British pence, from 62.18 pence
* 109.94 New Zealand cents, from 109.19 NZ cents
GOLD:
The spot price of gold in Sydney at 1700 AEDT was $US1,226.10 per fine ounce, up $US23.27 from $US1,202.83 on Wednesday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 5.25 per cent March 2019, 1.8166pct, down from 1.877pct
* CGS 4.25pct April 2026, 2.758pct, down from 2.859pct
Sydney Futures Exchange prices:
* June 2017 10-year bond futures contract at 97.14 (implying a yield of 2.86pct), from 97.035 (2.865pct) on Wednesday
* June 2017 3-year bond futures contract at 97.93 (2.07pct), from 97.855 (2.145pct)
(*Currency closes taken at 1700 AEDT previous local session, bond market closes taken at 1630 AEDT previous local session)
