The Australian dollar took a breather on Friday after its worst performance in five weeks following a poor employment report that fuelled the risk of further rate cuts. The Australian dollar was sitting at $0.7630, having slid 1.3 percent on Thursday, the most since September 13. Despite the decline, the Aussie is still set to end the week mostly unchanged.
The Aussie has been resilient in recent weeks against a resurgent US dollar but recent dovish comments by the Reserve Bank of Australia in the minutes of its October policy meeting and the latest jobs data tamed its rise. Thursday's data showed a drop of 53,000 full-time jobs and a decline in the number of people looking for work.
"Traders had pushed back any easing expectations until mid-2017, but they are now more sensitive to weak data after RBA highlighted the importance of next week's inflation in the October minutes," said Matt Simpson, senior analyst at ThinkMarkets. The New Zealand dollar was down 0.1 percent at $0.7182 Friday, as the greenback strengthened after the European Central Bank quashed any speculation of tapering its stimulus. The kiwi has rallied 1.4 percent this week after consumer price figures came in higher-than-expected, suggesting inflation may have finally bottomed.
New Zealand government bonds were mixed, with yields down half a basis point at the long end but slightly higher through the middle of the curve. Australian government bond futures were unchanged, with the three-year bond contract at 98.32 and the 10-year contract at 97.735.
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