Forex - Australian dollar down early in Asia in holiday-thinned trade

Investing.com - The Australian dollar was weaker in Asia on Monday as was the Japanese yen in thin trade with many markets shut for to mark Eid.

AUD/USD traded at 0.8662, down 0.16%, while USD/JPY traded at 109.81, up 0.03%.

Australia's September TD-MI Inflation Gauge rose 0.1%, up from flat in August.

Also Monday is the ANZ job ads survey for September. In recent months, the survey has been signalling slow improvement in labor market.

Overnight, the U.S. dollar rallied to more than four year peaks against the other major currencies after the latest employment report showed that the U.S. economy added more jobs than expected last month, fuelling expectations for an early hike in interest rates.

The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, was up 1.23% to 86.79 in late trade, a high last seen in June 2010, capping its twelfth consecutive weekly gain. The twelve-week rally is the longest since the index was created in 1971.

The index was up 0.04% to 86.82 on Monday.

The U.S. economy added 248,000 jobs in September, the Labor Department reported, well ahead of forecasts for jobs growth of 215,000. The unemployment rate ticked down from 6.0% to 5.9%, the lowest level since July 2008.

The upbeat jobs report was tempered by slow growth in wages. Average hourly earnings rose by 2.0% year-over-year, slowing slightly from August.

The robust data added to the view that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner than markets are expecting.

In contrast, the Bank of Japan and the European Central Bank look likely to stick to a loose monetary policy stance amid concerns over faltering economic growth.

In the coming week, investors will be looking ahead to Wednesday’s Federal Reserve meeting minutes for further indications on the future possible direction of U.S. monetary policy.

Monetary policy decisions by the BoJ, Reserve Bank of Australia and the BoE will also be in focus.

On Monday, markets in China are to remain closed for a national holiday. In the euro zone, Germany is to release data on factory orders. Later in the day, Canada is to publish its Ivey PMI.