The Australian dollar strengthened against most of its major counterparts after a government report showed employers added more than twice as many jobs as economists forecast.
Australia’s currency gained for the first time in four days against the greenback as the extra yield the South Pacific nation’s bonds offer compared with Treasuries widened and traders added to bets the central bank will boost interest rates. New Zealand’s dollar fell for a second day against Australia’s after the smaller country’s central bank said borrowing costs will likely rise “to a more limited extent” during the next two years.
“This is significant data and it supports the Australian dollar,” said Robert Rennie, head of currency research in Sydney at Westpac Banking Corp., Australia’s second-largest lender. “The market is more or less fully priced for a hike by September next year, today’s data suggests that you probably want to start bringing that forward.”
Australia’s currency rose 0.3 percent to 98.29 U.S. cents as of 11:35 a.m. in New York from 97.96 yesterday, after weakening 1.4 percent in the past three days. The Aussie gained 0.3 percent to 82.54 yen, and appreciated 0.5 percent to NZ$1.3173.
New Zealand’s dollar fell 0.1 percent to 74.65 U.S. cents, and traded at 62.66 yen from 62.82 yen.
Australia’s currency rallied after the statistics bureau said employers added 54,600 workers in November, reducing the unemployment rate to 5.2 percent from 5.4 percent in October. Economists forecast 20,000 extra jobs, according to a Bloomberg News survey.
Reserve Bank of Australia Governor Glenn Stevens will increase the benchmark rate by about 40 basis points during the next 12 months, up from a prediction of 24 basis points at the end of last week, according to a Credit Suisse AG index.
New Zealand’s dollar slid to a six-week low against Australia’s as economists from Bank of New Zealand Ltd. and TD Securities Inc. set back their predictions for when the central bank will resume raising rates.
The kiwi fell as low as NZ$1.3216 per Australian dollar, the weakest since Oct. 25.
Governor Alan Bollard left New Zealand’s benchmark interest rate unchanged at 3 percent, saying the nation’s worst earthquake in 80 years may curb economic growth in the near term.
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