$A plunges after jobless rate rises
The Australian dollar dropped to its lowest level in nearly six years after a rise in the unemployment rate sparked more calls for a March interest rate cut.
At 1700 AEDT on Thursday, the local unit was trading at 76.51 US cents, down from 77.76 cents on Wednesday.
Unemployment rose to 6.4 per cent in January, from 6.1 per cent in December, after the number of full-time jobs fell by 28,100.
Soon after those figures were released the Australian dollar plunged as low as 76.44 US cents, its weakest level since May 2009.
Westpac chief currency strategist Robert Rennie said there are more economist forecasting a follow up interest rate cut by the Reserve Bank in March.
The futures market almost doubled the chances of a March interest rate cut on the back of the data.
"Last week the RBA highlighted that the unemployment peak would be a little higher than expected and today's unemployment rate was a lot higher than most would have expected," he said.
"It does seem to be the case that a number other economists in the market are shifting views as a result of the RBA's statement last week and today's weaker than expected employment numbers and obviously the Aussie has suffered as a result."
Mr Rennie said there could be further weakness ahead for the Australian dollar because of concerns about negotiations between Greece's new anti-austerity government and its European partners over the conditions of its huge bailout deal.
At 1700 AEDT, the Australian dollar was at 92.03 Japanese yen, down from Wednesday's close of 92.97 yen, and at 67.62 euro cents, down from 68.72 euro cents.
Meanwhile, bond futures prices were higher.
Nomura head of macro products Jon Linton said the disappointing jobs figures appeared to give a "green light" to a March interest rate cut after the RBA reduced the rate at its board meeting last week.
"The jobless rate is trending higher, it's now up to 6.4 per cent, which is where most people saw it topping out, but if it is there already the danger is they're going to revise that higher," he said.
Mr Linton said while there is a chance of lower interest rates in Australia and higher interest rates in the US, the local bond market will continue to strengthen.
At 1630 AEDT on Thursday, the March 2015 10-year bond futures contract was trading at 97.500 (implying a yield of 2.500 per cent), up from 97.445 (2.555 per cent) on Wednesday.
The March 2015 three-year bond futures contract was at 98.140 (1.860 per cent), up from 98.050 (1.950 per cent).
