The Australian dollar rose almost one US cent on stronger than expected employment data which dampened market expectations that interest rates could be cut in coming months.
At 1700 AEST on Thursday, the Australian dollar was trading at 103.91 US cents, up from 103.02 cents on Wednesday.
The local currency was at 84.21 Japanese yen, up from 83.22 yen on Wednesday and at 79.13 euro cents, up from 78.46 euro cents.
St George chief economist Hans Kunnen said the local currency rose sharply after stronger than expected domestic employment data cut expectations that the Reserve Bank of Australia (RBA) would deliver a series of interest rate cuts over the next few months.
The Australian Bureau of Statistics reported that 44,000 jobs were added to the national economy in March, well above economists' expectations for an increase of 5,000 jobs.
The unemployment rate in March was steady from February, at 5.2 per cent, but the participation rate rose to 65.4 per cent from 65.2 per cent.
Mr Kunnen said most economists still expected the RBA to cut the cash rate in May but further cuts in the following months were now unlikely.
"It probably knocks out the notion of two rate cuts, which some people had been expecting," he said.
"Rates will probably still fall but the foreign exchange markets are no longer pricing in two falls and some may be pricing in the possibility that the RBA won't cut at all."
The RBA kept the cash rate on hold at 4.25 per cent in April as it had also done in March and February but indicated it was open to a cut in May if the economic outlook deteriorated.
The RBA also reported that it would assess the strength and trend of the March quarter consumer price index data, due later this month, when it next decided on the direction of interest rates.
The stronger than expected jobs data also pushed Australian bond future prices lower.
At 1700 AEST on Thursday, the June 10-year bond futures contract was trading at 96.150 (implying a yield of 3.850 per cent), down from Wednesday's close of 96.170 (3.830 per cent).
The June three-year bond futures contract was at 96.690 (3.310), down from 96.770 (3.230 per cent).
The RBA's trade weighted index was at 76.8, up from 76.3.