SYDNEY/WELLINGTON: The Australian dollar climbed to its highest in a week against the greenback on Thursday and gained on its New Zealand counterpart as well after an expectedly strong jobs report prompted markets to trim interest rate cut expectations.  

The Australian dollar hits a session peak at $1.0375 -- its highest since April 3 -- from around $1.0305 before the data. Resistance seen around $1.0373, the ceiling of a downtrend channel from the late-Feb high.

Against the yen, the Aussie climbs to 83.90, putting further distance from a two-month low around 82.50 plumbed just a day ago. On the kiwi dollar, it bounces off a six-month trough of NZ$1.2515 to NZ$1.2646.

Moves come after Australian employment surges past all expectations in March, with the jobless rate staying at a low 5.2 pct, suggesting the economy is faring better than feared.

Interbank futures slide across the strip, driving their implied yields higher as markets pare rate cut expectations.

The May interbank futures contract falls to 95.940 from high of 95.970, giving a 76 pct probability of a rate cut next month vs 88 pct earlier.

Implied yield curve flattens sharply as a result, with the three-year bond futures sharply underperforming the 10-year.

Kiwi briefly tracks Aussie up to $0.8222, from $0.8192. But has since relinquished most of the gains to last stand at $0.8196.

Kiwi support remains at $0.8150, after failing to break strong resistance at $0.8225.

NZ data still points to modest growth, with March PMI retreating from a high level in the previous month, while electronics card retail sales perking up. See also and

No change in NZ rate pricing, with markets looking for key rate to stay at 2.5 pct for much of the year.

NZ government bond prices lower, prodding yields 5.5 basis points higher across the curve.

Market attention now turning to Italian bond sale due later in the day, and the all-important China Q1 GDP data on Friday.