Australian Dollar Rises on Speculation Jobs Rebounded in June

By Candice Zachariahs

July 10 (Bloomberg) -- The Australian dollar gained against the U.S. currency for the first time in five days before a government report expected to show employment rebounded in June.

The currency climbed the most in two weeks on speculation a mining boom will spur jobs growth and prompt traders to resume betting the central bank raise interest rates for a third time this year to cool inflation. The number of people employed rose 10,000 last month after a 19,700 drop in May, according to the median estimate of 25 economists surveyed by Bloomberg News.

``The Australian economy is in a very strong shape in large part because of the global commodity boom,'' said Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia, the nation's largest lender. ``That's feeding through to a strong Australian dollar, lots of spending and that means more employment.''

The Australian dollar rose 0.4 percent to 95.57 U.S. cents at 9:39 a.m. in Sydney, from 95.17 cents in late Asian trading yesterday. It bought 102.07 yen from 102.19.

Demand for commodities from emerging markets including China and India helped exports rise to a record in May, helping to offset falling consumer spending and business confidence. Prior to the jobs decline in May, Australian employers had added workers every month from October 2006, the longest run of gains since the government began publishing monthly figures in 1978.

The statistics bureau will release the employment report at 11:30 a.m. in Sydney.

Rebounding Currency

The Australian dollar fell to a three-week low yesterday as traders reduced bets the central bank will raise borrowing costs after a government report showed home-loan approvals slid by the most in eight years and a private-sector survey of consumer confidence dropped to the lowest level since 1992.

Traders have assigned 12 percent odds to the Reserve Bank of Australia raising its 7.25 percent benchmark interest rate by a quarter-percentage point in the next 12 months, according to a Credit Suisse Group index based on trading in interest-rate swaps. The probabilities were 72 percent a week ago.

Australian government bonds gained for a fifth day. The yield on the 10-year bond fell 4 basis points, or 0.04 percentage point, to 6.30 percent. The price of the 5.25 percent bond maturing in March 2019 rose 0.257, or A$2.57 per A$1,000 face amount, to 91.902. Bond yields move inversely to price.

To contact the reporter on this story: Candice Zachariahs in New York at czachariahs1@bloomberg.net.