The Australian dollar was trading at a five-week high against the US dollar on Thursday, pushed higher by an exceptionally strong domestic labour-market report.

The Aussie was 0.9% higher at $1.0398 after 71,500 jobs were added in Australia in February, a sharp acceleration from the 13,100 gain in January and well ahead of the 10,000 increase expected. The jobless rate was unchanged at 5.4%, despite forecasts for a rise to 5.5%.

However, strong gains for the currency were trimmed after the Reserve Bank of Australia said that the the figures were "subject to some statistical error".

Nevertheless, the report was still strong enough to contain speculation of a further rate cut from the central bank, providing upwards pressure on the Aussie dollar.

Meanwhile, the ICE dollar index, which measures the US currency against a basket of six others, fell 0.40% to 82.578 after an earlier rise.

The greenback gained strongly earlier on as data continues to improve in the US labour market. US jobless claims fell to 332,000 last week, the lowest number since January and below the 350,000 forecast, while the four-week moving average dropped to its lowest level in five years.

The strong figures - when combined with the better-than-expected employment February employment report - have increased fears that the Federal Reserve could choose to scale back its current stimulus measures later this year.

However, the dollar, after hitting a three-month high against the euro earlier in the day, erased losses as the single-currency strengthened as the EU summit began in Brussels.

The euro was up 0.39% at $1.3011 as leaders in the EU member states called for greater flexibility on deficit targets and a focus on growth over austerity.

BC

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