Australian Dollar Gains on Jobs Data; New Zealand’s Strengthens

By Candice Zachariahs

Feb. 12 (Bloomberg) -- The Australian dollar rose for the first time in three days after employers unexpectedly added full- time workers last month, signaling the economy may avoid a recession. New Zealand’s currency advanced.

Australia’s currency also gained against Japan’s yen, halting a two-day loss, after the statistics bureau report showed the number of people employed climbed 1,200. The median of 17 economists surveyed by Bloomberg News was for a decline of 18,000.

“What we keep seeing in the monthly data is rising resilience in the economy,” said Ashley Davies, a currency strategist in Singapore at UBS AG, the world’s second-biggest currency trader. The data “makes me more confident in the Australian dollar,” Davies said.

Australia’s currency rose to 65.83 U.S. cents as of 11:56 a.m. in Sydney from 65.20 cents just before the data and 65.35 cents in Asia yesterday. The currency advanced 1.1 percent to 59.38 yen from 58.75 yesterday and 58.81 before the numbers.

New Zealand’s dollar gained 0.1 percent to 52.46 U.S. cents from 52.44 in Asia yesterday. It bought 47.35 yen from 47.15.

UBS forecasts that the currency will trade at 75 U.S. cents in 12 months.

The currencies earlier advanced along with equities as U.S. lawmakers agreed on a $789 billion stimulus plan for the world’s largest economy. House Majority Leader Harry Reid told reporters yesterday that Congress may vote on the plan within days.

“The Aussie and kiwi are closely following equity markets,” said Tony Allen, head of currency trading at ANZ National Bank Ltd. in Wellington, referring to the currencies by their nicknames.

Goldman Forecast

The currencies are likely to trade in ranges between 64.80 to 65.80 U.S. cents for the Australian dollar and 52.10 and 52.80 cents for New Zealand’s currency, said Allen.

New Zealand’s dollar will decline to 48 U.S. cents in the next 12 months because of concern over the sustainability of the nation’s current-account deficits, Goldman Sachs Group Inc. said in a report dated yesterday. The currency will trade at 52 U.S. cents in three months and 50 cents in six months, the bank said, revising its previous forecasts.

Benchmark interest rates are 3.25 percent in Australia and 3.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero percent in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits.

Australian government bonds rose for a fourth day. The yield on the 10-year note fell six basis points, or 0.06 percentage point, to 4.2 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 advanced 0.473, or A$4.73 per A$1,000 face amount, to 108.582.

New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, fell to 3.34 percent from 3.38 yesterday.

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