The Australian dollar cemented its rally above 76 US cents on Friday, winding back only slightly from a fresh offshore 7-month peak as data this week refocused the market on the risk of tighter monetary policy. The Aussie made its first move above 76 cents for the first time since April after last Friday's strong payrolls data failed to lift the US dollar, but has since whipped around the figure.
The AUD was $0.7651/57 compared with $0.7592/95 late here on Thursday. The Aussie touched a peak of $0.7660 overnight, extending the rally from 68.50 cents in early September.
"The failure of the USD to put in a decent rally despite stronger than expected employment and trade data over the past week or so is an ominous sign pointing to further USD weakness and hence strength in the A$, euro and other currencies," said AMP Capital Investors chief economist Shane Oliver.
"As such the A$looks increasingly likely to retest its February high of $US0.80," he said.
The next major local event is a speech by Reserve Bank of Australia Governor Ian Macfarlane on Tuesday. The central bank said in its quarterly statement this week that it saw no pressing need for a tightening, although still expected a move in the current economic expansion.
A Reuters poll of 20 economists on Friday found 10 expecting the cash rate to stay at 5.25 percent in the March quarter, nine forecasting a quarter point tightening to 5.50 percent rate and one predicting an easing.
However, the icing on the cake for economists looking for a near-term, currency-supportive interest rate hike came with a tumble in Australia's unemployment rate to 5.3 percent in Thursday's data, its lowest level since monthly employment readings in 1978.
This came on top of a robust business survey, consumer confidence rebounding to a fresh 10-year high and a bounce in housing finance for investors.
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