Australia, New Zealand Dollars Rise Most in More Than 3 Weeks

By Candice Zachariahs

Nov. 25 (Bloomberg) -- The Australian and New Zealand dollars gained the most in more than three weeks as U.S. stocks advanced after the government stepped in to help Citigroup Inc., buoying investor appetite for higher-yielding assets.

The currencies advanced for a second day as prices rose for commodities that account for more than half of the nations’ exports. They strengthened as the Dow Jones Industrial Average posted its biggest two-day rally since 1987 after the government guaranteed $306 billion of Citigroup assets and U.S. lawmakers pledged to pass another stimulus package.

“The market will be supportive to the currencies with the Dow finishing higher,” said Alex Sinton, a senior currency dealer at ANZ National Bank Ltd. in Auckland. “We’ve probably seen the highs for the day in the Aussie and kiwi,” he said, referring to the currencies by their nicknames.

Australia’s currency rose 3.7 percent, the most since Oct. 30, to 65.28 U.S. cents as of 8:40 a.m. in Sydney from 62.93 cents late in Asia yesterday. The currency advanced 5.8 percent to 63.37 yen.

New Zealand’s dollar gained 2.4 percent, also the most since Oct. 30, to 54.77 U.S. cents from 53.47 cents in Asia yesterday. It bought 53.16 yen from 50.89.

Citigroup, which lost more than 60 percent of its market value last week, rebounded more than 50 percent after the government agreed to guarantee troubled assets and to inject $20 billion into the bank. Equities also advanced as President-elect Barack Obama announced Lawrence Summers, a former Treasury Secretary who stepped down as president of Harvard University in June 2006, as White House economic director.

The South Pacific nations’ dollars were higher as the UBS Bloomberg Constant Maturity Commodity index of 26 raw materials rose the most since Oct. 29. Gold, Australia’s third most- valuable raw material export, reached a five-week high as the U.S. dollar weakened.

To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net