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Forex - AUD/USD continue to fall on Australian unemployment figures

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Shutterstock photo - The Australian dollar continued to fall against U.S. dollar during the morning Asian trading hours as lower than expected employment figures raised concerns that Australian central bank can cut interest rates to boost the economy.

On Thursday, Australian Bureau of Statistics had reported that the number of full-time workers fell by 22,600 in December.

AUD/USD traded down 0.05% at 0.8816, USD/JPY traded down 0.05% at 104.29, and NZD/USD traded down 0.04% to 83.49.

On Thursday the U.S. dollar softened against most major currencies after U.S. inflation data came in line with expectations though still remained off the Federal Reserve's target figure, while an upbeat regional factory gauge cushioned the greenback's losses.

Government data revealed earlier that the U.S. consumer price index rose by 0.3% in December, in line with forecasts after holding flat in November.

Core consumer prices, which are stripped of volatile food and energy costs, inched up 0.1% last month, also meeting estimates. Core consumer prices rose 0.2% in November.

The country's year-on-year inflation rate expanded by 1.5%, still below the Fed's 2.0% target, which served as a reminder that as the Federal Reserve scales back its USD75 billion bond-buying program this year, it will do so gradually at best, while monetary tightening remains far off on the horizon.

Fed bond purchases aim to spur recovery by suppressing long-term interest rates, thus keeping the dollar soft as long as they remain in effect.

Elsewhere, the Federal Reserve Bank of Philadelphia said that its manufacturing index improved to 9.4 in January from 6.4 in December. Analysts had expected a reading of 8.6.

However, indicators of future activity moderated, the report added, but they continued to indicate general optimism concerning economic growth over the next six months, which gave the greenback some support.

Separately, the U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending Jan. 11 declined by 2,000 to 326,000 from the previous week's revised total of 328,000. Analysts had expected U.S. jobless claims to hold steady last week

Meanwhile in Europe, the euro found support after European Central Bank governing council member Jens Weidmann played down fears over deflationary pressures in the currency bloc.

Weidmann, also the head of Germany's Bundesbank, said he saw the upswing in the German economy continuing into this year and the next, and his comments helped offset lackluster inflation data.

Eurostat reported earlier the euro area's consumer price index rose 0.8% on a year-over-year basis in December, in line with expectations and unchanged from a preliminary estimate though still well below the ECB's 2% target.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.01% at 81.02.

Later today, the U.S. is to wrap up the week with the closely watched preliminary reading of the University of Michigan consumer sentiment index. The U.S. is also to release data on building permits, housing starts and industrial produ offers an extensive set of professional tools for the financial markets.

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