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Australian dollar holds biggest two-week gain before jobs report
[SINGAPORE] The Australian dollar held its biggest gain in two weeks versus the greenback as investors awaited a jobs report for clues on whether the central bank is done cutting interest rates.
Investors expect bigger price swings in the Aussie after a surge in crude-oil prices lifted the currencies of commodity-exporting nations Wednesday. Employers in Australia probably added 13,000 new positions in January, keeping the jobless rate at a two-year low of 5.8 per cent, according to analysts' median estimatesin a Bloomberg survey.
The Reserve Bank of Australia, which left interest rates unchanged at a record low this month, said in minutes of its Feb 2 policy meeting released Tuesday that it will monitor whether strong jobs growth is sustained.
"We expect the Australian dollar to remain supported today on an encouraging Australia January labor force report," said Elias Haddad, a currency strategist at Commonwealth Bank of Australia in Sydney.
"A positive Australian labor market report would support our view that the RBA is on hold."
The Aussie traded at 71.75 US cents at 8:56 am in Tokyo, after surging one per cent to 71.85 Wednesday in the biggest gain since Feb 3. A gauge of one-month implied volatility in the exchange rate rose to 13.42 per cent Thursday, approaching a five-month high of 13.84 per cent reached last week.
New Zealand's currency was little changed at 66.31 US cents, after climbing 0.8 per cent in New York.