Australia’s dollar touched a one-month high on prospects a report this week will show jobs grew for a second month, enhancing local assets’ allure relative to the U.S., where labor data last week fell short of estimates.
The Aussie completed back-to-back weekly gains on Jan. 10, the first since August, as traders evaluated whether the U.S. data will affect the Federal Reserve’s decisions on further reductions in stimulus that has tended to weaken the greenback. Australia’s bonds rose, sending the benchmark 10-year yield to the lowest level since Dec. 18. The premium over shorter-dated notes narrowed as bets on rate cuts in Australia declined.
“The data coming out of Australia has been stable to good and that needs to continue with the unemployment number later this week for people to reassess their rates outlook,” said Derek Mumford, a director at Rochford Capital, foreign-exchange risk-management company in Sydney. “If the Aussie can consolidate above 89.50, there’s potential for a move higher.”
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