The Australian dollar held firm on Thursday following a mixed jobs report and with investors cautious ahead of the Reserve Bank of Australia’s (RBA) quarterly economic outlook, while the New Zealand dollar struggled near three-week lows.

The Aussie edged up to $0.7983, having popped above $0.8000 cents overnight. Support was seen at $0.7918 with resistance at $0.8000.

The Aussie briefly dipped after Australian employment eased 2,900 in April, missing forecasts of a 5,000 rise, while the jobless rate rose a tick to 6.2 per cent. However, March data was revised upwards.

“Overall, the stability of today’s data is consistent with the RBA moving toward a less explicit easing mentality in their guidance earlier this week,’’ said Ben Jarman, a strategist at JPMorgan.

The RBA had cut rates to a record low of 2.0 per cent on Tuesday to support an economy facing weak business investment.

Market focus is on the RBA’s forecast for inflation and growth on Friday with talk it might open the door to a further cut as a means of putting downward pressure on the local dollar, which has gained around a cent and a half this week.

Markets are pricing in the scant probability of another rate cut in June or July, and a one-in-three chance by August.

The New Zealand dollar struggled for traction at $0.7503, having touched a three-week low when soft wages data prompted investors to narrow the odds of a rate cut by the Reserve Bank of New Zealand.

Financial markets imply a 28 per cent chance of a cut in June, up from 16 per cent early in the week, while 38 basis points of easing is seen over the next 12 months.

Kiwi support is at $0.7460 and a more substantial floor at $0.7420, while $0.7560 is seen capping the topside.

The kiwi was weaker against most majors, notably the euro which gained more than 2 per cent to a 10-week high of NZ$1.5154 as European bond yields surged.

New Zealand government bonds were softer sending yields as much as 4 basis points higher at the long end of the curve. The 10-year bond yield was at its highest since the start of the year.

Tracking the steep rise in European and US yields, Australian government bond futures dropped to their lowest this year in a bearish steepening of the curve.

The three-year bond contract slipped 5 ticks to 97.830. The 10-year contract was down 9 ticks to 96.9850, a level not seen since early December.

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