Australian Dollar Near a 10-Month High as Employers Adds Jobs

By Matthew Brown and Theresa Barraclough

Aug. 6 (Bloomberg) -- The Australian dollar rose to near the highest level against the dollar in 10 months after the nation’s employers unexpectedly added jobs in July. The yen fell as gains in stocks fueled demand for high-yielding currencies.

The Aussie advanced for the fifth time in six days, making it the third-best performer versus the U.S. dollar in the past three months. The euro and the pound were little changed before interest-rate decisions by the European Central Bank and Bank of England. The yen fell after a Ministry of Finance report showed the nation’s investors bought 10.2 billion yen ($107 billion) more overseas stocks than they sold last week.

“The Australian currency spiked up on that huge shock with employment rising and not falling,” said John Kyriakopoulos, Sydney-based head of currency strategy at National Australia Bank Ltd. “You really needed signs that the economy was doing better than the Reserve Bank of Australia expected to keep those rate-hike expectations high and support the currency.”

The Australian dollar climbed to 84.22 U.S. cents as of 10 a.m. in London, from 84.06 cents yesterday, and strengthened to 80.31 yen from 79.82 yen. Japan’s currency weakened to 95.35 per dollar from 94.97. The euro was little changed at $1.4404 and rose to 137.34 yen, from 136.79. The pound was little changed at $1.6988 and 84.78 pence per euro.

Australian Jobs

The number of people employed in Australia rose by 32,200 from June, the statistics bureau said today. A decline of 18,000 was expected, according to a Bloomberg News survey.

Stocks rose around the world after Belgium’s KBC Group NV reported a surprise profit, U.K. insurer Aviva Plc posted a first-half profit that beat analysts’ estimates and TDK Corp., the world’s biggest maker of magnetic heads for disk drives, reported a second-quarter net loss that was less than analysts estimated. The MSCI World Index advanced 0.5 percent.

The VIX Index, a measure of stock-market volatility known as Wall Street’s fear gauge, fell to as low as 24.86 yesterday, the least since July 28.

The pound traded near a nine-month high against the dollar after the Royal Institution of Chartered Surveyors said Britain’s house prices will increase this year, reversing an earlier prediction for a decline.

The U.K. currency also held near its highest level in more than a month against the euro. The average price of a home will be “slightly higher” in the fourth quarter of 2009 than it was in the same period last year, RICS said.

‘Helping Sterling’

“The housing recovery is definitely helping sterling,” said Adam Cole, the London-based head of global currency strategy at RBC Capital Markets, a unit of Canada’s biggest bank. “Data in the U.K. has been so good this week that sterling is outperforming.”

Eight of 12 primary dealers surveyed by Bloomberg said the U.K. central bank will end a five-month program of bond purchases after announcing a pause at its policy meeting today.

The Bank of England will keep its main rate at 0.5 percent today, according to all 60 economists in a Bloomberg News survey. The ECB will probably leave the region’s main refinancing rate at a record low of 1 percent, according to all 52 economists surveyed in a separate poll.

To contact the reporters on this story: Matthew Brown in London at mbrown42@bloomberg.net; Theresa Barraclough in Tokyo at tbarraclough@bloomberg.net