The Australian dollar has surged to a nine-month high after the chances of a May rate cut slimmed further.

At 0700 AEST on Friday, the local unit was trading at 76.95 US cents, up from 76.54 cents on Thursday.

The currency outperformed all major currencies overnight to reach 77.37 US cents, the highest level since July last year.

The Aussie/Kiwi cross also had its strongest one-day rise in more than a month as the two currencies moved in completely opposite directions, BK Asset Management director of FX strategy Kathy Lien said.

“It could be a reaction to changes in monetary policy expectations by local banks,” she said.

Australian markets pushed back the prospect of a rate cut to August following a strong local jobs report on Thursday.

AAP

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