The Australian dollar is higher against a much weaker US dollar after the release of a disappointing US employment report.
The data pushed the local unit above 97 cents in early trade Wednesday trading at 97.09 US cents, up from 96.55 cents on Tuesday.
In overnight trade, the currency peaked at 97.32 US cents, its highest level since June 4.
The dollar then ticked up further on local news; it rose a third of a US cent after the release of stronger than expected inflation data on Wednesday morning.
At 1130 AEDT, the Australian Bureau of Statistics (ABS) announced that Australia’s headline consumer price index (CPI) rose 1.2 per cent in the September quarter, for an annual rate of 2.2 per cent.
The median market forecast was for the headline CPI to have risen by 0.8 per cent in the September quarter, for an annual pace of 1.8 per cent, according to an AAP survey of 11 economists.
At 1135 the Australian dollar was 97.45 US cents.
In the US the nonfarm payrolls report showed the US economy added 148,000 jobs in September, well below the gain of 180,000 the market was expecting.
The data increased expectations the US Federal Reserve won’t wind back its economic stimulus program until next year.
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Forex.com senior currency strategist Eric Viloria said the data caused a selloff in the greenback, which gave the Australian dollar a boost.
“The lacklustre payrolls data suggests that the Fed is more likely to delay tapering until at least early next year,” he said.
“Therefore, the Fed’s balance sheet will continue to expand at a tremendous pace of $US85 billion per month and the US dollar is likely to remain under pressure.”
