Dollar rallies on jobs data

THE Australian dollar jumped more than half a US cent to its highest level in more than a month after strong domestic jobs growth.

THE Australian dollar jumped more than half a US cent to its highest level in more than a month after official figures showed the strongest domestic jobs growth since 2000.

At 12pm AEDT today, the currency was trading at 103.79 US cents, up from 103.14 cents yesterday afternoon.

The Australian dollar jumped from around 103.05 US cents to a one-month high of 103.84 US cents after figures released at 11.30am AEDT showed total employment grew by 71,500 in February.

The Australian Bureau of Statistics data showed a large rise in the participation rate - the percentage of the working age population either in work or looking for a job - while the unemployment rate remained steady at 5.4 per cent.

Commonwealth Bank currency strategist Peter Dragicevich said the surprise surge in jobs growth had reduced expectations of further interest rate cuts, which had provided a boost for the Australian dollar.

"Obviously we had a much better result than anyone had expected so that has been supportive of the Aussie dollar," he said.

The Reserve Bank of Australia kept the cash rate on hold at 3.0 per cent in February and March.

He said the rally was likely to continue into the European and US sessions overnight and could see the Australian dollar push past 104 US cents for the first time since early February.

"We would expect the support for the Aussie to continue as more market participants roll in later today, especially in the European session."

Meanwhile, Australian bond futures were weaker at noon. At 12pm AEDT today, the March 10-year bond futures contract was trading at 96.360 (implying a yield of 3.640 per cent), down from 96.445 (3.555 per cent) yesterday. The March three-year bond futures contract was at 96.840 (3.160 per cent), down from 97.005 (2.995 per cent).