The Aussie dollar lost more ground on Thursday, dampened by regional weakness in equity markets rather than responding to stronger than expected jobs data.
The local unit was trading steadily below US70¢ for most of the morning before falling to a low of US69.20¢ shortly after the jobs figures were released. It stayed low for most of the afternoon before dropping again to another four-month low of US69.19¢. Late afternoon the Aussie was buying US69.38¢.
"There wasn't enough compelling strength in the jobs figures to really shift people's broader assessments for the trajectory of the economy," said Daniel Bean, currency strategist at ANZ.
"It wasn't like there was much negative sentiment around the economy that needed to be unwound. It's everything else that's looking a little bit troublesome and that's what's pushing the dollar down."
A vicious and broad sell-off has pushed the ASX to its lowest point since mid-2013, taking this year's losses to around $105 billion, after the continuing rout in commodity prices, and particularly in oil, sparked an overnight plunge on Wall Street.
China's recent devaluation of the yuan has sparked a broad sell-off in currencies in the Asia-Pacific region, including the Australian dollar.
"The Australian dollar is the liquid China economic proxy, and unlike shorting local Chinese assets or currency you don't get whipsawed by policy intervention," said James Purcell, a cross-asset strategist at UBS Group AG's wealth-management business in Hong Kong.
"We expect the September lows to be broken and the Australian dollar to head to 65 US cents in 12 months."
A lower Australia dollar will be pleasing to the Reserve Bank of Australia said JPMorgan chief economist Stephen Walters, after the jobs figures were released.
"Whenever the Australian dollar is below 70 cents the RBA is probably content to let the currency work for them rather than lowering interest rates."
The local unit is still considered a "commodity currency" making is susceptible to the oil price, which is seemingly in freefall. Oil is plumbing 12-year lows as oversupply and geopolitical risks keep traders away.
Australian refiners, hamstrung by a high Australian dollar in recent years, are another group pleased to see the Aussie at these levels.
"A high Australian dollar has been particularly challenging for manufacturing businesses, so the currency depreciation over the last 12 months has certainly been a very welcome relief," Viva chief executive Scott Wyatt told the Australian Financial Review yesterday.
While China has eased capital controls and extended yuan trading hours, the Aussie is the world's fifth most-traded currency and an effective round-the-clock bet on the Asian giant, free of official interference.
Australia's economy is dependent on Chinese spending in sectors from commodities to education and tourism, raising the risk that a misstep in Beijing will derail growth in the South Pacific nation.
The dollar struggled against its US counterpart overnight as American markets experienced another sell-off in shares, which are still taking cues from unstable Chinese stock markets.
Sentiment in Asia was rocked after several explosions were heard in the centre of the Indonesian capital.