Oct. 4 (Bloomberg) -- The Australian dollar gained after the price of copper surged to a record, bolstering the outlook for export earnings, which may help narrow the trade deficit.

The Australian dollar is influenced by metals prices because sales of raw materials overseas account for about 10 percent of the country's economic output. A government report today will probably show Australia's trade deficit narrowed in August to the lowest in two years as mining exports increased.

``The considerable staying power of commodity prices is supporting the'' Australian dollar, said Sue Trinh, a currency strategist at Bank of New Zealand Ltd. in Wellington.

The Australian dollar bought 76.27 U.S. cents as of 8 a.m. in Sydney from 76.15 cents in late Asian trading yesterday. The currency gained versus the U.S. dollar as the euro and yen fell.

Copper futures for December delivery rose 1.8 percent to $1.759 a pound on the Comex division of the New York Mercantile Exchange, after earlier reaching a record $1.76. Australia is the world's fourth-biggest copper producer.

The deficit in traded goods and services probably narrowed to A$1.33 billion ($1 billion), which would be the smallest gap since January 2003, from A$1.46 billion in July, according to the median forecast of 18 economists surveyed by Bloomberg News.

The Bureau of Statistics will release the report at 11:30 a.m. today in Sydney.

A narrowing trade deficit supports the currency because it signals less foreign exchange is required to pay for imports while more Australian dollars are repatriated by local companies.

To contact the reporter on this story: Chris Young in Sydney at cyoung12@bloomberg.net.

Last Updated: October 3, 2005 18:17 EDT