WELLINGTON/SYDNEY: The Australian dollar staged a bit of a bounce on Thursday after a surprisingly upbeat jobs report eased expectations of deep cuts to interest rates, but risk sentiment remained fragile due to uncertainty in the euro zone.
Aussie jumps more than half a cent to $1.0120 after Australian employment far outpaced expectations by adding 15,500 in April. Unemployment rate surprisingly dips to 4.9 pct vs forecasts of a rise to 5.3 pct.
Markets widen the odds of a 25bp-rate cut in June with interbank futures implying a 50-50 chance, down from 78 pct before the data. However, markets still looking for a total easing of around 96 bps by December.
The Aussie is last at $1.0115, off a 4-month low of $1.0021 plumbed overnight. Charts show the bounce above Tuesday's high of $1.0116 could suggest the trend lower is waning. Traders cite stops above $1.0125.
Attention now on Chinese trade data due this afternoon.
Antipodeans also climb against the safe-haven yen, having also hit four-month lows offshore. Aussie at 80.57 yen , off a trough of 79.68, while kiwi at 62.71 from a low of 61.86, its weakest since January.
Antipodean currencies have come under intense pressure due to mounting worries about the health of Spanish banks, while deepening political chaos in Greece seemed to put it at risk of insolvency and a euro exit.
The kiwi follows the Aussie higher to $0.7873, from around $0.7845 before the data, pulling away from an overnight low of $0.7813, its weakest since early January.
Kiwi still on the defensive, with the latest PMI manufacturing survey pointing to weakness in the sector, while housing market data was mixed.
Kiwi seen supported around Jan 2's low of $0.7758 while resistance held at $0.7988, the low on May 3.
The Aussie and kiwi have dropped more than 3 pct so far this month and remain highly vulnerable to developments in Europe.
They were already facing pressure on signs of slowing economic growth at home, which resulted in a surprisingly big cut in Australian interest rates this month.
Australian government bonds run into profit-taking following hefty gains. The 10-year cash yield is at 3.37 pct, off a 61-year trough of 3.33 pct.
The three-year contract eases 0.040 points to 97.290, having peaked to 97.440, its highest since 1992, while the 10-year contract flat at 96.690, down from a lifetime high of 96.780.
NZ government bond prices little changed, with yields half a basis point lower across the curve.
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