SYDNEY (Reuters) - The Australian dollar hopped higher on Thursday after solid local jobs data led investors to trim the chance of a cut in interest rates next month, though futures still favoured December for a move.
The Aussie <AUD=D3> gained 0.4% to $0.6785 and edged away from the week's low of $0.6724, though it remained shy of the recent top at $0.6810.
The New Zealand dollar <NZD=D3> lagged behind to be flat on the day at $0.6288, but was up from the week's trough of $0.6241.
Thursday's data showed employment rose 14,700 in September, much as expected, while full-time jobs increased by a healthy 26,200.
That helped nudge the jobless rate down a tick to 5.2%, when analysts had expected it to hold at a one-year high of 5.3%. [L3N2710VJ]
The futures market <0#YIB:> reacted by trimming the probability of a November rate cut to around 20%, down from 34% at the start of the week, while December was put at 60%.
The Reserve Bank of Australia (RBA) has already cut rates three times this year to an all-time low of 0.75%, arguing more stimulus was needed to drive unemployment down.
Analysts noted the jobless rate was still some way from the RBA's goal of around 4.5% and leading indicators of labour demand, such as vacancies, had softened recently.
"We think this month's modest decline in the unemployment rate will be temporary and emphasise we are still a long way away from the RBA's full employment aim," said Westpac economist Simon Murray.
"It does however allow the RBA some more time to monitor the economy before having to act again."
Westpac currently sees the RBA cutting to 0.5% in February.
Australian government bond futures dipped only slightly on the jobs data, with the three-year bond contract <YTTc1> off 2 ticks at 99.290.
The 10-year contract <YTCc1> also eased 2 ticks to 98.930, implying a yield of 1.07%.
Yields on New Zealand government bonds <0#NZTSY=> rose 1 to 2 basis points across the curve.
(Editing by Sam Holmes)
