The Australian dollar has pushed to new four-month highs against the US dollar and euro even as new US jobs data showed a recovery from the impact of the severe winter season.
The local currency rose to a fresh four-month high of US93.08¢ early on Saturday morning as the US dollar fell when a healthy US non-farm payrolls report failed to met the market's heightened expectations.
The Australian dollar, which had been easing slightly last week as it look for new reasons to strengthen, soared by more than half a cent when the American figures were released. It kept more of its gains and was fetching US92.94¢ early on Monday.
"We were all a bit startled to see how poorly the US dollar had traded," Westpac senior currency strategist Sean Callow said.
"It was matched by lower yields. [Ten-year] US Treasuries essentially went from just short of 2.80 per cent back to 2.72 per cent, so it does seem as though there was a lot more optimism built into the US dollar ahead of the employment report."
At the same time, a report that the European Central Bank (ECB) had modelled bond-buying as a way to starve off deflation saw investors flee the currency.
The report, in the Frankfurter Allgemeine Zeitung newspaper, came after the ECB had already pledged to further ease monetary conditions earlier last week.
The Australian dollar surged to a four-month high against the euro, reaching 68.04 euro cents on Saturday morning. It eased back slightly and was buying 67.83 euro cents on Monday morning.
"The fact that they are talking about it has taken some heat out of the euro, and speculators do love punishing the euro. You know you've got the official blessing."