Aussie dollar closes higher

The Australian dollar closed stronger after gains on the local equity market and better than expected employment data boosted investor appetite for risk currencies.

At 1700 AEST on Thursday, the local currency was trading at US$0.8427/31, up from Wednesday's close of US$0.8402/06.

During the domestic session, the unit moved between US$0.8397 and US$0.8461.

ICAP economist Adam Carr said the local unit reached an intraday high soon after the Australian Bureau of Statistics (ABS) released the labour force data for July that showed a steady jobless rate at 5.8 per cent.

"The reality is the Australian economy is on a very solid footing and we'll certainly see the Reserve Bank of Australia (RBS) will be the first central bank to withdraw stimulus and that will support the Aussie dollar, " Mr Carr said.

The local unit had earlier dipped below US$0.8400 after New Zealand posted a 6 per cent jobless rate for the three months to June, up from 5 per cent the previous quarter.

The unit recovered after the ABS posted the Australian unemployment data at 1130 AEST.

The median market forecast was for total employment to have declined by 18,000 and and unemployment rate of 6.0 per cent, whereas total employment rose by 32,200 to 10.794 million, seasonally adjusted.

Mr Carr said investor appetite for risk was further supported a firmer local share market.

At the 1615 AEST, the benchmark S&P/ASX 200 index was up 61.8 points, or 1.45 per cent, at 4326.3, while the broader All Ordinaries index gained 58.8 points, or 1.38 per cent, to 4331.

During Friday's offshore session the Reserve Bank of Australia is due to publish its quarterly statement on monetary policy.

The central bank's monetary policy statement will assess economic conditions and the prospects for inflation and growth.

Mr Carr said he expected the local unit to firm past US$0.8500 over the next week.

- AAP