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The Australian dollar has fallen to its lowest value in a month — due to a weaker-than-expected jobs report, and US interest rate yields continuing to outperform Australia's.
The local currency fell sharply (-1.3pc) to 74.68 US cents at 7:45am AEST, after the US greenback experienced broad-based gains overnight.
Markets at 7:15am (AEST):
- ASX SPI 200 futures +0.5pc to 6,058, ASX 200 (Thursday close) -0.1pc at 6,017
- AUD: 74.68 US cents, 56.32 British pence, 64.53 Euro cents, 82.66 Japanese yen, $NZ1.07
- US: Dow Jones -0.1pc at 25,175, S&P 500 +0.25pc at 2,782, Nasdaq +0.85pc at 7,761
- Europe: FTSE +0.8pc at 7,766, DAX +1.7pc at 13,107, CAC +1.4pc at 5,528, Euro Stoxx 50 +1.4pc at 3,527
- Commodities: Brent crude -1pc at $US75.96/barrel, spot gold +0.2pc at $US1,301.83/ounce, iron ore +2.2pc to $US68.49/tonne
It didn't help that yesterday's job figures were considered "disappointing" by the market, as it revealed a lower participation rate, and the creation of 12,000 new jobs was a weaker-than-expected result.
This, "reinforced expectations that a RBA [Reserve Bank] interest rate hike is still a fair way off", Commonwealth Bank's senior currency strategist Elias Haddad said.
Also pressuring the Australian dollar was the Federal Reserve's decision to lift the US benchmark interest rate to a range between 1.75 and 2 per cent, on Thursday morning (AEST).
In contrast, the Reserve Bank has kept Australia's official cash rate at the record low 1.5 per cent for the past couple of years.
ECB decision boosts markets
The Australian share market is expected to start the day higher, after the European Central Bank (ECB) decided not to lift interest rates, from their record-lows, until at least the middle of 2019.
Paris and Frankfurt stock markets jumped by 1.4 and 1.7 per cent respectively, while London rose by a moderate 0.8 per cent.
The ECB said it will also dismantle its crisis-era stimulus program by the end of this year, a decade after the start of the euro zone's economic downturn.
Europe's central bank is planning to reduce monthly bond purchases, between October and December, to 15 billion euros ($23.2 billion), before ending the program.
This led to the euro suffering its biggest daily loss against the US dollar in eight months.
The Australian dollar benefitted from the euro's fall, gaining 0.5 per cent to 64.56 euro cents.
Wall Street's mixed day
The S&P 500 and Nasdaq closed higher, gaining 0.25 and 0.85 per cent respectively. after the ECB's monetary policy decision.
However, the Dow Jones fell slightly (-0.1pc) to 25,175 points.
Of the 11 major sectors of the S&P, seven finished the session in positive territory.
The rate-sensitive financial sector was the biggest percentage loser of the S&P 500, led by a 1.8 per cent fall in JP Morgan Chase shares.
Shares in Twenty-First Century Fox jumped 2.1 per cent, after Comcast — the owner of the NBCUniversal media network — issued a $US65 million ($87 million) takeover bid for most of Fox's TV and film assets.
Comcast is in a bidding war with Disney, and has outbid Disney's previous offer by 20 per cent.
Microsoft Corp shares advanced 0.6 per cent on news it was working on technology to automate retail purchases in a challenge to Amazon.
Shares of Royal Caribbean Cruises jumped 5.1 per cent after the company bought a 66.7 per cent stake in privately held Silversea Cruises for about $US1 billion ($1.34 billion).
Topics: business-economics-and-finance, economic-trends, company-news, markets, stockmarket, australia, united-states, european-union