The Australian dollar was holding hefty gains for the week today, in part due to the growing perception the Reserve Bank of Australia may not ease again this year.
The gains came even as solid US data only added to speculation the Federal Reserve will soon pull back on its super easy monetary easing.
The Aussie stood at 91.36 US cent, from 91.46 US cents late in local trade, not far from a three-week peak of 91.88 US cents on Thursday. It was also at one-month highs against the euro and yen .
Technicals suggest a failure to break above heavy resistance at 92 US cents could signal a correction and reinstate short positions. Support was seen at 91.10 US cents, ahead of 90.60 US cents.
The Aussie has gained 2.5 per cent so far this week against its US counterpart as markets pared back expectations for more rate cuts. Interbank futures show a 40 per cent chance of a rate cut by Christmas, down from more than 100 per cent a couple of weeks ago.
Swap markets are actually pricing in 9 basis points of tightening on a one-year horizon, a huge turnaround in just the past week.
Ironically, though, the resulting rise in the Aussie has made it more likely the RBA will have to cut again. The central bank has been counting on a lower currency to boost export revenues and ease competitive pressures on domestic industries.
For now, investors were cautious ahead of an influential US payrolls report due later on Friday. A strong reading could cement the case the Fed will scale back its asset-buying programme as early as this month.
For some though, the data outcome has become nearly irrelevant.
"The jobs data matters less given the recent string of strong (US) data. It's not that the payroll is the tipping point," said Annette Beacher, head of Asia-Pacific Research at TD Securities in Singapore.
She expects the Fed to announce a small start to tapering on September 17.
The Australian dollar was the fifth most-actively traded currency, with its share rising to 8.6 per cent from 7.6 per cent.