THE Australian dollar closed at a one-month high after official jobs data showed a surge in full time employment in August.
At 1700 AEST on Thursday, the local unit was trading at 92.16 US cents, up from Wednesday's close of 91.59 cents.
It was the highest close for a domestic session since August 6, when the local dollar ended the trading day at 92.22 US cents.
Since 0700 AEST, the local currency traded between 91.73 cents and 92.36 cents.
CMC Markets foreign exchange dealer Tim Waterer said the local currency was boosted above 92 US cents after the Australian Bureau of Statistics reported the jobless rate was a seasonally adjusted 5.1 per cent in August, down from 5.3 per cent in July.
"Those employment numbers made for good reading across the board from a market standpoint," Mr Waterer said.
"The number the traders took note of was the full-time employment figure."
Full-time employment rose by 53,100 to 7.9204 million in August and part-time employment was down by 22,100 to 3.352 million, the ABS said.
Traders said the data added pressure on the Reserve Bank of Australia (RBA) to lift the cash rate from 4.5 per cent as early as October.
Prior to Thursday's data, market analysts had focused on a November or December rate rise.
"The data means that traders are pricing in a higher chance of a rate move by the RBA, potentially in October," Mr Waterer said.
At 1700 AEST, the Australian dollar was at 77.16 Japanese yen, down from Wednesday's close of 76.52 yen, and at 72.69 euro cents, up from its previous close of 71.97.
The euro finished at 1.2679 US dollars, down from 1.2728 US dollars, and at 106.16 yen, down from 106.33.
The US dollar was at 83.72 Japanese yen, up from 83.55 previously.
Meanwhile, the Australian debt market closed weaker.
At 1630 AEST on the Sydney Futures Exchange, the September 10-year bond futures contract was at 95.070 (4.930 per cent), down from Wednesday's close of 95.120 (4.880 per cent).
The September three-year bond futures contract was at 95.440 (4.560 per cent) down from its previous close of 95.490 (4.510 per cent).
JP Morgan interest rate strategist Sally Auld said the jobs data caused a sell-off in the local market.
"People were short going into the jobs data," she said.
"The housing finance numbers we saw yesterday and the jobs data today led to the sell-off.
"If we get good data out or continue to see an improvement in the global economic story, the RBA could lift rates in October," Ms Auld said.
Higher interest rates erode the value of safe-haven assets such as bonds.
The jobs data came a day after ABS housing finance figures for July showed a 1.7 per cent increase, seasonally adjusted, to 47,511 from June.
Ms Auld said the direction of the market in offshore trade would depend on how US equities performed.
The 90-day bank bill closed at 4.750, steady from Wednesday, while the 180-day bank bill rate was at 4.900, up from 4.870 previously.
At 1600 AEST, the RBA's trade weighted index (TWI) was at 70.8, up from Wednesday's close of 70.3.
