The Australian dollar surged and interbank futures slid on Thursday after a strong jobs report led markets to cut the odds of an interest rate cut in the next couple of months. The Australian dollar leapt 1.2 percent to a three-week high of $0.7782, pulling away from a six-year low of $0.7534 touched earlier this month. It was last at $0.7765 to show a gain of more than 1 percent for the session.
It also jumped around 1 percent versus the yen, pound and its kiwi neighbour, while the euro skidded more than a cent to A$1.3786, pulling close to a March trough of A$1.3711. A break under A$1.3711 would be the lowest in nearly two years.
"They certainly seem to have changed the economic landscape a little. We're now discovering that employment is stronger and unemployment is lower than we thought," said Michael Blythe, chief economist at CBA.
Australian debt futures slipped as much as 5 ticks, pricing a less than 50-50 chance of a rate cut in May to 2.0 percent, from 60 percent before the data.
Australian government bond futures dropped sharply, with the three-year bond contract off 13 ticks at 98.230. The 10-year contract slipped 9 ticks to 97.6300, leading to a bearish flattening of the curve.
With all the attention on the Aussie, the New Zealand dollar took a back seat to hold steady at $0.7596. It kept most of gains made offshore, when weak US economic data had triggered broad selling in the greenback.
Against a currency basket, the kiwi pushed up to a three-week high of 79.64.
New Zealand government bonds fell, pushing yields as much as 8 basis points higher across the curve.
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