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Australian dollar awaits jobs data, kiwi at 1-week low as dairy prices falls

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The Australian dollar marked time on Wednesday ahead of monthly employment data later this week while its New Zealand cousin suffered from a steep drop in the prices of dairy, the country's top export.

[SYDNEY] The Australian dollar marked time on Wednesday ahead of monthly employment data later this week while its New Zealand cousin suffered from a steep drop in the prices of dairy, the country's top export.

Trading in major currencies was generally slow as investors head into the holiday season awaiting further details on the Sino-US trade deal.

At 0400 GMT, the Australian dollar was 0.09 per cent lower at US$0.6844 and on track for its second consecutive session of losses on expectations the central bank would cut interest rates again next year.

The Reserve Bank of Australia (RBA) has lowered its benchmark rate three times this year to a record low 0.75 per cent. Financial futures are predicting a 50-50 chance of a cut in February while a full 25 basis point easing is fully priced in by May.

Focus now turns to November employment data due out on Thursday, where disappointment could bring forward the timing of another RBA rate cut.

Data out on Wednesday showed an index of internet job vacancies decreased 1.3 per cent in trend terms in November to record its biggest fall in seven months. It was the 11th successive monthly fall.

The index is now 10.6 per cent lower than a year ago, the biggest annual decline in six years.

"The job vacancies data released today is the entree before tomorrow's 'main meal' – the November labour market report – is served," said Ryan Felsman, senior economist at CommSec.

"Leading indicators of job growth point to a continuing softening of labour market conditions – testing the Reserve Bank's policy resolve."

RBA Governor Philip Lowe has said the national jobless rate must fall to or below 4.5 per cent from the current 5.3 per cent for it to generate any wage or inflation pressures.

Across the Tasman Sea, the New Zealand dollar slipped 0.2 per cent to a one-week trough of US$0.6559.

International milk prices fell at a fortnightly global dairy auction held in the wee hours of morning with the GDT Price Index skidding 5.1 per cent.

The auction results affect the kiwi as the dairy sector generates more than 7 per cent of the nation's gross domestic product.

New Zealand government bonds eased a little, with yields about 1 basis point higher across the curve.

Australian government bond futures dipped, with the three-year bond contract off 2.5 ticks at 99.275. The 10-year contract inched 3 ticks lower to 98.8050.

REUTERS