SYDNEY: The Australian and New Zealand dollars surged on Thursday after markets were wrong footed by another stunning jobs report in Australia, while the Reserve Bank of New Zealand surprised some by almost shutting the door on further easing.
The Australian dollar soared 1.3 percent to $0.7325, pulling closer to a four-month peak of $0.7386 touched last week.
It powered up 1.5 percent on the yen, while the euro and pound skidded two full cents and pence against the Aussie.
Australian employment climbed by 71,400 in November, pushing the jobless rate to the lowest in 19 months.
The strong job report, for the second month in a row, confounded analysts who had forecasts a drop of 10,000.
"This doesn't necessarily rule out further interest rate cuts when the outlook for investment and inflation is still so weak, but it does make them less likely," said Paul Dales, chief Australia and New Zealand economist at Capital Economics.
Australian debt futures slipped as much as 7.5 ticks, pricing in less than a one-in-five chance of a cut to 1.75 percent by March, rising to one-in three by May.
The Reserve Bank of Australia left its cash rate unchanged this month, citing some improvement in economic conditions.
Across the Tasman sea, the New Zealand dollar surged by more than a full cent to $0.6751, within reach of a peak of $0.6787 touched last week. A break above would test 69 cents, a level last seen in October.
It jumped as far as $0.6782, from $0.6640, after the Reserve Bank of New Zealand (RBNZ) cut interest rates to 2.50 percent but appeared less dovish than the market had anticipated.
"They gave a weak easing bias, but because they didn't lower forward guidance, it sent a clear message that they are done cutting rates, so the market thinks the next move is up," said Annette Beacher, head of Asia-Pacific research at TD Securities.
A majority of economists see rates steady next year at 2.5 percent.
The kiwi jumped more than 1 percent against the euro, pound and yen, but could not outpace its Aussie cousin.
New Zealand government bonds rose, sending yields between 1 and 2 basis points lower along the curve.
Australian government bond futures fell sharply, with the three-year bond contract off 12 ticks to 97.780. It briefly touched a five-month low.
The 10-year contract dropped 6 ticks to 97.0900, while the 20-year contract was a touch softer a 96.6200.
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