SYDNEY (Dow Jones)--A rosier-than-expected employment report for June saw the Australian dollar bid higher, as dealers viewed the jobs data as a sign the country's underlying economy remains healthy, even after a string of soft indicators.
Some 23,400 jobs were added in the month and the unemployment rate held steady at 4.9%. Economists on average had expected an unemployment rate of 4.9% in June, with the number of employed up 15,000. That number was noteworthy as it came after months of flat jobs growth and soft retail sales and house prices.
"Markets can be relieved that the Australian economy remains healthy, although we still expect full-time employment growth to continue slowing for some months, which means today's jump isn't signalling to the RBA (Reserve Bank of Australia) any urgency to hike interest rates," said Roland Randall, a senior strategist at TD Securities.
At 0542 GMT, the Australian dollar was at US$1.0735, up from US$1.0699 before the jobs data and US$1.0724 late Wednesday. Against the Japanese yen, the Australian dollar was at Y86.895, down from Y86.80.
Few economists expect the strong report to speed up the prospects of a rate hike by the RBA, given the ongoing turmoil in both the global economy and markets.
Front-end bond futures fell six points after the release, before trading sideways to end the day unchanged from Wednesday's close of 95.25.
"Even with three-year bonds trading at par with the cash rate, we aren't convinced that risk/reward favors short positions and are happy to remain neutral at current levels," said JPMorgan interest rate strategist Sally Auld.
Analysts say the market is now focused on the European Central Bank's policy-setting meeting later in the global day, although the bigger focus remains squarely on efforts to resolve the Greek debt crisis.
"The ECB meeting is almost relegated to the status of a sideshow," said BNP Paribas strategists, noting the bank is expected to keep policy steady.
--By Enda Curran, Dow Jones Newswires; 61-2-8272-4687; enda.curran@dowjones.com
