Australian dollar increases on poor US unemployment data

The Australian dollar rose after hitting parity overnight as the US dollar went down, burdened by the worse than expected US unemployment report.

At 0700 AEDT, Aussie dollar trading was at 99.77 US cents, higher than Thursday’s 99.52 cents. The local currency exchange rate ranges from 99.36 US cents and 100.15 cents since 1700 AEDT on Thursday.

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The US Department of Labor reported yesterday that 35,000 more unemployment insurance claims were made last week, increasing the previous week’s 410,000 seasonally adjusted insurance claims number to 445,000. The total additional claims last week was the highest since October and was more than what economists had expected.

Kathy Lien, currency research director of GFT Forex, attributed the sharp fall of the USD to the frustrating data released by the labour authority and added that the US economy could really use more jobs.

She said, "It is the missing ingredient in the US recovery that has frustrated Federal Reserve officials the most and explains why the dollar fell sharply following this morning's US economic reports.

"The sell-off in the US dollar drove the euro above 1.32 towards 1.33, the pound above 1.58, USD/JPY to 82.50 and the Aussie back above parity."

The Australian stock market, on the other hand, is getting mixed offshore leads overnight. Investors await release of the US retail and December inflation numbers in the coming offshore session.