The Australian dollar rose on Thursday after a solid labour market report but the uptick was contained as the sharp jump in jobs was still not enough to push the unemployment rate lower, while New Zealand's currency was largely steady.
The Australian dollar AUD=D3 advanced more than 0.5 percent to as high as $0.7444 after official data showed 50,900 net new jobs were added in June, blowing past expectations of 17,000. It was the largest monthly gain since November.
The Aussie has come back a bit to last trade around $0.7428. The upbeat report would be welcome news for policymakers but the Reserve Bank of Australia (RBA) is looking for further falls in unemployment which stayed stuck at 5.4 percent as more people went looking for work. The jobless rate has ranged between 5.4 to 5.6 percent for almost a year now.
"From a Reserve Bank perspective, there is clearly no appetite for tighter policy right now," said Callam Pickering, APAC economist for global job site Indeed. "These data are certainly welcome but do nothing to change that."
"Such a high degree of labour market slack is not conducive to higher wages or inflation and until that changes the RBA won't be in any hurry to hike. Households and businesses should rest easy in the knowledge that we won't see higher interest rates until at least next year," Pickering said.
Interbank futures
0#YIB: only show a 50-50 chance of a hike in the record-low 1.50 percent cash rate by August next year.Quarterly inflation data is due next week and economists generally expect consumer prices to stay below the RBA's 2-3 target range.
Across the Tasman Sea, the New Zealand dollar NZD=D3 was largely flat, around $0.6788, pausing after three consecutive sessions of gains.
The kiwi hit a near two-year low of $0.6688 earlier this month amid worries about escalating global trade tensions.
Investors have been selling both the antipodean currencies as a liquid proxy for Chinese assets, which have been beset by fears the heated trade conflict with the United States would stunt China's economic growth.
"There remain elements of caution, with export prices softening, trade tensions lingering and the domestic economy patchy, yet positioning remains the biggest near-term issue, which we suspect will see the kiwi biased to squeeze higher," said Liz Kendall, senior economist at ANZ Bank.
New Zealand government bonds
0#NZTSY= gained, sending yields 0.5 basis point lower at the long end of the curve.Australian government bond futures eased, with the three-year bond contract YTTc1 off 4 ticks at 97.86. The 10-year contract YTCc1 slipped 2.5 ticks to 97.3350.
