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AAP

2013-01-07

The Australian dollar is almost a third of a US cent higher after rallying during the offshore session on Friday night on the back of a solid US jobs report.

At 1700 AEDT on Monday, the local unit was trading at 104.72 US cents, up from 104.43 cents on Friday.

Since 0700 AEDT on Monday, the Australian dollar traded between 104.71 US cents and 105.13 cents.

US non-farm payrolls data, released on Friday, showed 155,000 jobs were added to the US economy in December, and the unemployment rate stayed steady at 7.8 per cent.

CMC Markets senior trader Tim Waterer said markets reacted positively to the figures, which helped the Australian dollar surge higher.

"The US jobs report on Friday wasn't a fantastic number but it came in close to expectations," he said.

"There were some positive signs there, the S&P 500 (in the US) and the Dow Jones index moved higher and that's what is keeping the Aussie dollar well supported."

Mr Waterer said the Australian dollar has a fairly circumspect start to the week after Friday's rally, trading in a fairly narrow range.

"It did have a nice run earlier in the session breaking through 105.00 US cents but it gave up some ground in the afternoon mainly because of some Asian equity market weakness," Mr Waterer said.

"It looks like any significant moves are being reserved for when we get some key economic data over the coming days."

On Tuesday the Australian Bureau of Statistics will release trade figures for November and on Wednesday it will release retail spending data and job vacancies numbers, both for November.

At 1700 AEDT, the Australian dollar was at 92.01 Japanese yen, down from Friday's close of 91.65 yen, and at 80.32 euro cents, up from 80.07 euro cents.

Meanwhile, Australian bond futures prices were slightly higher.

JP Morgan interest rate strategist Sally Auld said Australian bonds had a small rally but there doesn't seem to be anything driving the price action.

"The only thing is US Treasuries have rallied a little bit in Tokyo so maybe that has added to the bid tone in bond markets - also share markets are lower," she said.

"It's just one of those days when I wouldn't be surprised to see the move reversed when London and New York get in tonight."

At 1630 AEDT on Monday, the March 10-year bond futures contract was trading at 96.585 (implying a yield of 3.415 per cent), up from 96.575 (3.425 per cent) on Friday.

The March three-year bond futures contract was at 97.170 (2.830 per cent), up from 97.150 (2.850 per cent).

Jason Cadden and Evan Schwarten