SYDNEY/WELLINGTON: The Australian dollar flitted near three-month highs on Monday after data attested to the strength of the domestic economy, and kept alive talk that the next move in interest rates is up. The Australian dollar was strong at $0.9191, within sight of a three-month peak of $0.9223 hit on Friday. Traders said stop-loss buy orders were seen above $0.9223, suggesting more gains may be had if that level is breached. Although the Aussie dollar has had a strong run in recent weeks -- it is up 14 percent since its June trough of $0.8082 -- traders said they were still keen to buy it due to its yield advantage and Australia's buoyant economy. Indeed, data out Monday showed Australia's economy was growing at a solid clip. Job advertisements climbed to an 18-month high in July, boding well for the crucial official jobs report out later this week. Kieran Davies, chief economist at RBS, said the Australia's tightening labour market could force the Reserve Bank of Australia to raise rates once more to 4.75 percent by November, from 4.5 now. "If unemployment falls below 5 percent, and that looks highly probable, it would make the Reserve Bank quite uncomfortable about inflation," Davies said, adding that he expected rates to climb to 6 percent by December 2011. Analysts expect Thursday's jobs data to show unemployment unchanged at 5.1 percent in July with 20,000 jobs added. So confident were investors in the state of Australia's economy that data showing further weakness in mortgage demand was largely ignored. Australia's buoyant jobs market and relatively steep rates render it a rare breed among developed economies, where most are struggling with tepid growth amid record low rates. In the United States for example, Friday's disappointing payrolls data showed more jobs were shed in July than expected, while unemployment stayed high at 9.5 percent. That fed talk the Federal Reserve may expand its quantitative easing program to at its policy meeting on Tuesday boost growth. The prospect of U.S. rates staying near zero for longer yet only burnishes the Aussie's yield advantage. The spread between 10-year Australian and U.S. yields stand at a hefty 229.5 basis points, just under a two-year high of 234 hit Friday. The New Zealand dollar also held its ground at $0.7321, steady from Friday's offshore high of $0.7345. It is seen supported around $0.7250 with resistance at $0.74. "Despite further weak domestic data, the New Zealand dollar continues to thumb its nose at local developments," analysts at ANZ-National Bank said in a note to clients. The past week has seen a variety of bad economic news which the kiwi largely ignored, including a higher-than-expected jobless rate, declining house values and a fall in global prices for New Zealand's key export commodity, dairy.

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