By Cecile Lefort and Gyles Beckford
SYDNEY/WELLINGTON, Nov 7 (Reuters) - The Australian dollar lost ground on Thursday after a soft jobs report sparked a bout of speculative selling, although the data was seen as unlikely to build the case for a rate cut by the Reserve Bank of Australia.
It slipped half a cent to $0.9469, off a five-month high of $0.9758 set last month but still up on the week's low of $0.9430. It was also down around half a percent on the euro, yen and kiwi.
Australian employment rose only marginally in October, while full-time jobs dropped the most in 16 months. Still, the unemployment rate held at 5.7 percent where it has been for much of the year.
'The weakness in full-time jobs is a negative but I still think the RBA is not going to cut again because the labour market is a lagging indicator at this point of the cycle,' said Matthew Johnson, a rate strategist at UBS.
'I see the RBA on hold. The market reaction of a weaker Aussie dollar and lower yields is understandable, but over time people will focus on the improving demand outlook and yields will rise again and the Aussie will strengthen again.'
The reaction in debt markets was muted with interbank futures up at most 2 ticks. They imply no more than a one-in-five chance of another cut in the 2.5 percent cash rate.
Support for the Aussie was seen at $0.9440/50, with resistance at this week's peak of $0.9544.
Across the Tasman sea, the New Zealand dollar was dragged lower to $0.8363, from $0.8389 early, but rose to a three-week peak against its Aussie cousin.
The Aussie plumbed to NZ$1.1308, its lowest since mid-October, on a diverging rate outlook between Australia and New Zealand.
An upbeat jobs report released on Wednesday in New Zealand strengthened the case for a rise in interest rates there, possibly as early as March.
New Zealand government bonds edged up, sending yields marginally lower.
Australian government bond futures pared a little of their recent losses. The three-year bond contract rose 6 ticks to 96.870 and the 10-year contract 4 ticks to 95.875.
(Editing by Chris Gallagher) Keywords: MARKETS AUSTRALIA/FOREX
(Cecile.Lefort@thomsonreuters.com)(+61 2 9373-1234)(Reuters Messaging: email@example.com)
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