Dollar jumps v.s. Aussie, falls against pound

HONG KONG (MarketWatch) -- The dollar jumped against the Australian dollar on Thursday, after Australia's jobless rate climbed to the highest in a decade, sparking some concerns that the country's central bank might cut interest rates.

Meanwhile, the dollar eased against the British pound, as markets digested the U.K. central bank's upward revisions to its economic growth forecast this year.

The Australian dollar (AUDUSD)   tumbled to 89.51 U.S. cents from 90.29 U.S. cents late Wednesday.

The currency was lifted in the previous session by strong-than-expected Chinese trade numbers, since Australia is a major trade partner of China.

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However, the Aussie lost momentum quickly after Australia said Thursday that it lost 3,700 jobs in January, contrary to market expectations of an increase in employment. The unemployment rate jumped to 6%, its highest level in a decade.

"There's little doubt such weakness makes it too early to dismiss entirely the chance of the RBA (Reserve Bank of Australia) cutting further," said UBS economists in a report on Thursday. The data "should ease concern that the recent strong turnaround in housing activity, house prices, retail spending and business conditions -- and higher than expected CPI-- will lead to nearer term rate hikes."

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Analysts from financial service firm IG Group expected the Australian central bank to maintain a neutral stance for some time, while closely watching the looming private capital expenditure figures and future inflation reads.

Meanwhile, the British pound (GBPUSD)   rose further on Thursday after touching the highest level in three weeks in the previous session, up to $1.6607 from $1.6587 late Wednesday.

The Bank of England on Wednesday raised its growth forecast of the U.K. economy to 3.4% this year, up from a previous projection of 2.8%. The central bank also said the unemployment rate has fallen faster-than-expected and is likely to reach the 7% threshold by the spring of this year.

"The central bank's rosier outlook for the economy has driven U.K. yields sharply higher and we believe that they will continue to rise, driving GBP (the British pound) higher," said Kathy Lien, Managing Director for New York-based BK Asset Management.

Likewise, the dollar (USDJPY)   continued its downward trend against the yen after losses in the previous day, falling to ¥102.15 from ¥102.44 late Wednesday.

The euro (EURUSD)   also advanced against the dollar, to $1.3626 from $1.3592.

The ICE dollar index (DXY)  , which tracks the greenback against six other currencies, declined to 80.51 from 80.718 late Wednesday. The WSJ Dollar index (XX:BUXX)  , a measure of the U.S. unit's strength against a broader basket of comparison currencies, slipped to 73.77 from 73.86 late Wednesday.

In emerging markets, the dollar gained ground against the Indian rupee, the Mexican peso, the South African rand and the Turkish lira.