The benchmark S&P/ASX200 index on Monday rose by 53.4 points, or 0.7 per cent, to 7,682.4, while the broader All Ordinaries gained 54.8 points, or 0.69 per cent, to 7,952.3.
The gains came after a monthly labour market report over the weekend showed that US non-farm payrolls increased by 175,000 last month - a solid showing, but fewer than the 240,000 new jobs economists had expected. Unemployment ticked up to 3.9 per cent.
JP Morgan economists said in a client note that while the jobs report by itself wouldn't be enough to move the Fed on interest rates, the central bank might cut them if it were followed by additional weakness in future readouts.
JP Morgan still expects the US to trim rates in July, which is sooner than the market's current expectations of one US rate cut in September and another in December.
Following the report the US dollar fell to its lowest level since April 12 against a basket of other currencies, including the Aussie, which rose above 66 US cents for the first time in nearly four weeks.
Australia's Reserve Bank will make its own decision on interest rates on Tuesday, with 36 experts surveyed by Finder all in agreement that the central bank would hold rates at 4.35 per cent.
But traders will be carefully watching the language in the statement to see if the RBA reverts to more hawkish rhetoric following last month's hotter-than-expected inflation readout.
Eight of the ASX's 11 sectors finished higher on Monday, with industrials, consumer staples and health care dipping very modestly.
The interest-rate-sensitive property sector was the biggest gainer, up 1.8 per cent. Logistics centre owner Goodman Group gained 4.1 per cent to an all-time closing high of $33.98.
Westpac led the big banks higher after Australia's oldest corporation announced it was raising its dividend and engaging in a $1 billion share buyback despite a drop in profit.
Westpac made a $3.5 billion net profit after tax for the six months to March 31, down eight per cent from a year ago.
"This half, we've managed growth and margins in a disciplined way amid a slowing economy and competitive banking sector," chief executive Peter King said.
Westpac shares rose 2.7 per cent to a nearly two-month high of $27.12, while CBA added 1.2 per cent to $116.59, NAB climbed 0.8 per cent to $34.66 and ANZ grew 1.0 per cent to $28.77.
In the heavyweight mining sector, Fortescue climbed 2.6 per cent to $26.32, BHP rose 0.8 per cent to $42.75 and Rio Tinto added 0.3 per cent to $129.68.
Elsewhere, dual-listed Tourism Holdings plunged 36.8 per cent to an all-time low of $1.65 after the RV rental operator advised it now expects to earn about $51.5 million in profit in 2023/24, down from previous guidance of $75 million.
"The weakening economy has impacted most regions and business divisions negatively and lowered expectations into Q4," the Auckland-based company said.
On the flip side, Southern Cross Electrical Engineering soared 20.8 per cent to a 15-year high of $1.48 after being awarded its biggest-ever contract, $160 million to help build a massive battery in Collie, WA, meant to aid the state replace its coal-fired power with renewable energy.
The Australian dollar was buying 66.22 US cents, from 65.73 at Friday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Monday 53.4 points, or 0.7 per cent, at 7,682.4
* The broader All Ordinaries rose 54.8 points, or 0.69 per cent, to 7,952.3
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.22 US cents, from 65.73 US cents at Friday's ASX close
* 101.78 Japanese yen, from 100.69 Japanese yen
* 61.52 Euro cents, from 61.27 Euro cents
* 52.70 British pence, from 52.38 pence
* 110.10 NZ cents, from 110.12 NZ cents
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