Monday, May 05, 2008 4:32:28 AM - In early deals on Monday, the Australian dollar jumped to new multi-month highs against its Japanese and European counterparts on better-than-expected Australia`s house price data, a rising inflation gauge and an increase in job ads. The Aussie also climbed to 11-day and 4-day highs against the currencies of Canada and US, respectively.

The Australian Bureau of Statistics reported today that the house price index in Australia rose by 1.1% in the first quarter of 2008, beating economists forecast of 0.3% increase. On a yearly basis, the house price index climbed 13.8% in April, versus estimates that called for an 11% increase.

Inflation in Australia is growing at its fastest rate on record as oil prices reach new heights, according to an index released today by TD Securities and the Melbourne Institute. The gauge of inflation climbed 0.5% in April, lifting the annual rate to 4.3%. That was the highest in the five-year history of the series and well above the RBA`s 2-3% target band.

The number of job advertisements in major metropolitan newspapers rose by 16.5% in April, following a 10.5% drop in March, according to data released today by the Australia and New Zealand Banking Group Ltd. However, in trend terms, the number of newspaper job advertisements fell by 1.3%, to be 7.7% lower than a year ago.

The Aussie, which closed last week`s trading at 98.60 against the yen strengthened to a new multi-month high of 99.06 in early deals on Monday. If the Aussie gains further, it may test resistance around the 100.50 level.

The Australian dollar has been in an upward channel against the yen since March 20 when it touched a 7-month low of 88.21. Since then, the aussie has appreciated around 11%.

During early deals on Monday, the Aussie rose to a new multi-month high of 1.6434 versus the European currency. On the upside, 1.595 is seen as the next target level for the Aussie. The euro-aussie pair was worth 1.6492 at Friday`s close.

The Aussie climbed to a 4-day of 0.9415 against the US currency in today`s early deals. The next upside target level for the aussie is seen around 0.948. The Aussie that slumped to a 2-week low of 0.9278 against the greenback on Friday morning closed the day`s deals at 0.9363.

The US currency surged on Friday as U.S. jobs data showed a less-than-expected decline in non-farm payrolls in April.

The US nonfarm payrolls fell only 20,000 jobs in April following a revised decrease of 81,000 jobs in March. Economists were looking for a drop of 80,000 jobs. The continued decrease in jobs came as a drop in employment in the construction, manufacturing, and retail sectors more than offset an increase in jobs in health care and professional and technical services.

The Labor Department also said that the unemployment rate unexpectedly edged down to 5.0 percent in April from 5.1 percent in March. Economists had been expecting the unemployment to increase to 5.2 percent.

Against the Canadian dollar, the Aussie rose to an 11-day high of 0.9590 in early trading on Monday, compared to 0.9548 hit late New York Friday. If the aussie strengthens further, it may test resistance around a multi-year high of 0.970 hit on April 23.

The Reserve Bank of Australia is set to announce its interest rate decision tomorrow. Analysts expect the central bank to keep rates unchanged at its current 7.25%. But a new inflation survey released today suggests another rate rise cannot be ruled out in coming months.

The central bank raised interest rates by 25 bps in March for the fourth time in seven months after inflation surged above the 3% target. Reports in the past month showed that Australia`s consumer and business confidence dropped, while retail sales and home building slowed. Copyright © 2007 RTTNews.com. All Rights Reserved.