Aussie holds firm on strong jobs data

The Australian dollar was trading slightly higher at the week's end, holding on to the gains made on Thursday after the release of stellar jobs figures. The dollar was trading at US103.69¢, up from US103.64¢.

Official employment data on Thursday showed total growth of 71,500 last month, the largest monthly increase since July 2000.

Easy-Forex senior currency dealer Francisco Solar said the dollar had been trading in a tight range with little else to drive the currency's movement. "That optimistic tone prevailed into last night when the Dow Jones hit a fresh record high and that was an extra push for the Aussie," he said.

Mr Solar said the employment data caused revision in the forecasts for what the Reserve Bank of Australia would do with the cash rate, which stands at 3 per cent.

"Some currency strategists after the result either pushed back or completely removed any chance of a rate cut this year," he said.

"That, in itself, is a positive for the Aussie and probably the reason why the Aussie is still quite buoyant."

Meanwhile, bond futures prices bounced back as investors questioned whether recent jobs figures were indicative of what is really happening in the economy.

UBS interest-rates strategist Matthew Johnson said futures prices fell sharply on Thursday as optimistic traders moved out of safe-haven assets, but there were second thoughts about the jobs figures on Friday.

"There's some information that people are talking about that it is not really how the labour market is doing," he said. "People were saying that [the] jobs survey misrepresented things."

The June 10-year bond futures contract was trading at 96.345 (implying a yield of 3.655 per cent), up from 96.295 (3.705 per cent) on Thursday. The three-year contract was at 96.880 (3.120 per cent), up from 96.845 (3.155 per cent).

Mr Johnson said bond markets would be interested in US manufacturing data for March and February inflation figures due on Friday night.

"The Empire manufacturing survey [for New York State] will be a good one because that will give a hint for the outlook for March," he said.