The Australian dollar remains well above 93.5 US cents after better than expected employment figures fuelled hopes of a sustained jobs market recovery.
At 0700 AEST on Friday, the local currency was trading at 93.76 US cents, down from 93.84 cents on Thursday.
Australia’s unemployment rate stayed at 5.8 per cent in April, beating economists’ expectations of 5.9 per cent.
The number of people with jobs rose by 14,200, higher than the 8000 the market was expecting.
The encouraging figures, along with a strong Chinese trade report, had pushed the Australian dollar towards 94 US cents, BK Asset Management managing director Boris Schlossberg said.
“The double whammy of upside surprises provided a serious boost for the Aussie,” Schlossberg said.
“It’s recent rise will no doubt be viewed with concern by the Reserve Bank of Australia, but given the markedly improved fundamental background, the monetary authorities in Sydney will have a difficult time keeping policy accommodative if labour demand continues to strengthen.”
The strong jobs report suggested economic growth would be stronger too, Schlossberg said.
“Over the past four months Australia has gained more than 106,000 jobs versus just 60,000 jobs in all of 2013,” he said.
“The ramp up in the labour force is likely to translate into better than expected growth in the second half of the year especially since Chinese demand does not show any serious signs of deterioration for now.”
AAP