Dollar rises on bullish sentiment

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This was published 13 years ago

Dollar rises on bullish sentiment

The Australian dollar was higher in afternoon trade as it continued to ride the bullish sentiment coming from positive local and overseas economic data.

The local unit was trading at 92.27 US cents, earlier hitting a four-month high, up from Thursday's close of 92.15 US cents.

Since 7am AEST on Thursday, the local currency has traded between 91.20 and 92.40 US cents.

ICAP economist Adam Carr said the unit had maintained its overnight gains since US employment data encouraged a bout of risk appetite.

"It's solid above $US0.9200," he said.

"But from the open this morning it hasn't done a lot.

"The main thing to note is that we have held above $US0.9200."

In the US overnight the Department of Labor said the number of Americans signing up for unemployment benefits dropped to the lowest level in two months.

The news sent US stocks - and risk appetite in general - higher.

The encouraging US jobs data came a day after the Australian Bureau of Statistics said the domestic jobless rate was a seasonally adjusted 5.1 per cent in August, down from 5.3 per cent in July.

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Full-time employment rose by 53,100 in the month, while part-time employment fell 22,100.

Mr Carr said the data all but confirmed for the market the Reserve Bank of Australia's (RBA) next rate move will be up.

The local unit was supported, but not boosted, by data showing China's exports increased 34.4 percent in August from a year earlier, totalling $US139.3 billion ($151.01 billion) dollars for the month, Mr Carr said.

China's trade surplus in August totalled $US20.03 billion ($21.71 billion), customs authorities said Friday.

Mr Carr said he expected little movement from the Australian dollar for the rest of the session, with no domestic data due.

"Barring some sort of policy announcement, it will tread water around here."

AAP

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