An afterglow effect from Australia's stellar jobs numbers helped support the dollar in quiet trade today, although traders cautioned that further significant gains for the currency are unlikely in the near term.
"Today the Australian dollar largely consolidated gains from the prior sessions, with any move of significance north of $US1.04 likely to require a slowdown in US dollar momentum as well as a stronger performance from commodity prices. The performance of the Australian dollar was also kept in check by softer Chinese equities today," said Tim Waterer, trader at CMC Markets.
At 3.18pm AEDT, the Aussie fetched $US1.0371 compared with $US1.0365 late yesterday. It traded as high as $US1.0381 in Asia. In New York trade it rose above $US1.04 for the first time since February 6.
"We are watching for a break of $US1.0450 to be the catalyst for a possible push higher," said Chris Tedder, research analyst at FOREX.com.
Fuelling the Aussie is data from yesterday which showed that the number of people employed rose by 71,500 in February from January, driven by a surge of 53,700 part-time workers. Economists had expected a 10,000 increase overall in the job market. Unemployment rate remained at 5.4 per cent in February as more people actively sought work during the month.
Those robust figures have spurred bets that the Reserve Bank of Australia won't need to cut rates again, even after a top RBA official warned late Thursday not too read too much into the jobs data.
"Traders have become more and more convinced the present yield advantage that the Aussie enjoys will remain intact for the foreseeable future," said CMC's Mr Waterer.
The RBA last week kept interest rates on hold for the second month at 3 per cent, matching a low reached after the global financial crisis. It cited a nascent recovery in key parts of the economy, including housing and retail.
"We are not changing our view at this point in time as the employment and even the unemployment rate to some extent are notoriously volatile. However, we expect the market to continue to run with the theme that the RBA may be finished cutting interest rates," ANZ economists said in a note to clients.
