Australian, New Zealand Dollars Advance as U.S. Stocks Rise

By Candice Zachariahs

Nov. 14 (Bloomberg) -- The Australian and New Zealand dollars advanced the most in two weeks, snapping a three-day losing streak, as surging U.S. equities prompted investors to buy higher-yielding assets.

The currencies climbed from two-week lows yesterday after the Reserve Bank of Australia bought its own currency in the market for a second month.

``You've got strong closing momentum in the U.S. stock markets,'' said Tony Morriss, a senior currency strategist at Australia & New Zealand Banking Group. ``The rebound in the stock market reinforces the credibility of the RBA's actions.''

Australia's currency rose 4.5 percent to 66.69 U.S. cents as of 8:09 a.m. in Sydney from 63.85 cents late in Asia yesterday. The currency advanced 6.6 percent to 65.07 yen. The gains were the most since Oct. 30.

New Zealand's dollar advanced 3.4 percent, also the most since Oct. 30, to 57.57 U.S. cents from 55.67 in Asia yesterday. It bought 56.12 yen from 53.22.

The currencies advanced as U.S. stocks gained for the first time this week with investors buying energy shares trading at their cheapest valuations on record. The Standard & Poor's 500 index added 6.9 percent and Dow Jones Industrial Average advanced 6.7 percent.

The VIX volatility index, a Chicago Board Options Exchange gauge reflecting expectations for stock-market price changes and a measure of risk aversion, fell for the first time this week, closing at 59.83.

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