SYDNEY: The Australian and New Zealand dollars ticked up on Thursday as markets brushed off US inflation numbers that failed to disrupt the interest rate outlook for the Federal Reserve.
The Aussie also got a lift from a strong jobs report, hitting an intraday high of $0.6454 before steadying at $0.6438, up 0.3% on the day.
It had dipped to as far as $0.6381 overnight before recouping all of the losses.
The kiwi dollar rose 0.2% to $0.5930, having also eked out a small gain of 0.2% overnight.
Data on Thursday showed Australian jobs surged in August, with the job participation rate hitting a record high and jobless rate holding steady - signs that decade-high interest rates have yet to loosen demand in the drum-tight labour market.
However, the job gains - driven mostly by a jump in part-time employment - did not dent general expectations for the Reserve Bank of Australia to maintain its policy interest rate, as market participants continue to wager that the central bank’s monetary tightening campaign could well be over.
Belinda Allen, an economist at the Commonwealth Bank of Australia, said if the trend of new jobs being driven by part-time employment continues, that would be an additional sign of loosening demand for workers.
“The unemployment rate should lift further from here.”
Overnight, a much-anticipated US inflation report turned out to be an non-event, with market reactions quickly reversed. US consumer prices increased on month in August by the most in 14 months, but the annual rise in core prices - which exclude volatile components - was the smallest in nearly two years.
Financial markets moved to price in a 97% likelihood of the Federal Reserve standing pat at next week’s monetary policy meeting, and the amount of rate cuts is still seen about 100 basis points or so by the end of next year. Australian yields were lower on Thursday.
The benchmark 10-year government bond yields eased 4 basis points to 4.113% while the three-year yields slipped 2 bps to 3.832%.
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