THE Australian dollar finished at a 15-month closing high today after better than expected employment data firmed trader hopes of an interest rate rise in December.
At 5pm (AEDT), the Australian dollar was trading at 93.43 US cents, up from yesterday's close of 92.97 cents.
It was the highest close for the local unit since it finished at 93.65 US cents on August 1 last year.
During the overnight session, the unit traded in a tight range between 93.71 US cents and 92.98 cents.
TD securities senior strategist Annette Beacher said the Australian dollar broke out of its three-day, half-a-US-cent trading range after official jobs data showed a rise in employment.
"It really shook the Aussie out of that trading range because it's really about increasing risk for a December hike," she said.
"I doubt there's a pause on (the Reserve Bank's) mind."
The Reserve Bank of Australia (RBA) has lifted the cash rate by 25 basis points each at its past two monthly board meetings, in November and October, and the rate now sits at 3.5 per cent.
If the RBA takes the cash rate higher in December, it will be the first time it will have done so over three consecutive months since the bank started announcing its interest rate decisions in January 1990.
During the domestic session, Australian Bureau of Statistics (ABS) data showed Australia's unemployment rate was a seasonally adjusted 5.8 per cent in October, compared with unrevised 5.7 per cent in September.
Total employment rose by a seasonally adjusted 24,500 to 10.832 million in October, beating market expectations of a decline of 10,000.
Full-time employment rose by 2900 to 7.591 million in the month and part-time employment was up by 21,500 to 3.241 million.
The participation rate in October steady at 65.2 per cent.
Within minutes of the ABS releasing the jobs data, at 11.30am (AEDT), the debt futures market had fully priced in a 25 basis point rate rise for December.
"We've had two consecutive better than expected labour market reports, so I think the job sceptics can all go hide in a corner somewhere," Ms Beacher said.
At 5pm (AEDT), the Australian dollar was trading at 83.96 yen, up from Wednesday's close of 83.37 yen and at 62.29 euro cents, up from 62.03 euro cents previously.
The euro finished at 1.4998 US dollars, up from yesterday's close of 1.4986 US dollars, and at 134.77 Japanese yen, up from 134.37 yen previously.
The US dollar ended the local session at 89.87 Japanese yen, up from 89.67 yen previously.
Meanwhile, the Australian bond market closed mixed.
At 4.30pm (AEDT), the yield on the Commonwealth Government March 2019 bond was at 5.576 per cent, down from Wednesday's close of 5.593 per cent, while the yield on the April 2012 bond was at 5.059, up from 5.020 per cent previously.
On the Sydney Futures Exchange, the December 10-year bond futures contract price was at 94.400, up from Wednesday's close of 94.375, while the December three-year bond futures contract was at 94.820, down from 94.860 previously.
"They rallied at the longer end of the curve and there were some small increases at the short to medium curve," Nomura Australia chief economist Stephen Roberts said.
"The data today surprised on the upside, although the unemployment rate went up as expected."
The 90-day bank bill rate closed at 4.060 per cent, up from Wednesday's close of 4.010 per cent, while the 180-day bank bill rate closed at 4.390 per cent, up from 4.350 per cent previously.
At 4pm (AEDT), the Reserve Bank of Australia's trade weighted index (TWI) was at 71.6, up from yesterday's close of 71.2.
