Australian Dollar Holds Three-Day Loss Against Yen Before Employment Data

Australia’s dollar held a three-day loss against the yen before a report tomorrow forecast to show the country’s unemployment rose in October.

Declines in the so-called Aussie and New Zealand’s currency were limited after Italy’s Prime Minister Silvio Berlusconi offered to quit once Parliament approves austerity plans, reducing concern Europe’s debt crisis will worsen. China, Australia’s biggest trading partner and New Zealand’s second largest export market, said today that consumer price growth slowed in October from the previous month.

“While the Aussie did get a little bit of lift this morning following the news of the Italian prime minister’s resignation, the markets are still somewhat cautious over the potential for tomorrow’s employment report,” said Khoon Goh, head of market economics and strategy at ANZ National Bank Ltd. in Wellington.

Australia’s dollar slid 0.2 percent to 80.60 yen as of 12:37 p.m. in Sydney from 80.78 yen yesterday in New York, when it declined 0.3 percent. The currency fetched $1.0388 from $1.0393. The New Zealand dollar, known as the kiwi, lost 0.2 percent to 61.92 yen from yesterday when it fell 0.3 percent. It was little changed at 79.78 U.S. cents.

Australian employment data tomorrow is forecast to show the jobless rate rose to 5.3 percent in October from 5.2 percent in the previous month, according to median forecast of economists in a Bloomberg News survey.

Berlusconi to Resign

Italian President Giorgio Napolitano said in an e-mailed statement yesterday after talks with the prime minister that he’d received Berlusconi’s offer to resign once Parliament passes austerity measures in a vote next week. The government has yet to present the final text of the amendment to the budget law with the austerity measures.

Italy’s 10-year bond yield rose to 6.77 percent yesterday, approaching the 7 percent level that forced Greece, Ireland and Portugal to seek bailouts.

“If bond yields continue to stay elevated or even start to go higher, that signals markets are becoming increasingly concerned," said ANZ’s Goh. "The fact that the Italian prime minister will step down hasn’t gone really a long way in easing investors’ fears about Italy’s fiscal situation.”

China’s consumer prices rose 5.5 percent in October from a year earlier, the National Bureau of Statistics said on its website today. That compared with the 5.5 percent median estimate in a Bloomberg News survey of 27 economists and a 6.1 percent gain the previous month.

“A moderation in inflation may allow markets to anticipate an easing of China’s policy and thus fewer downside risks to the Australian outlook,” Emma Lawson, a currency strategist at National Australia Bank Ltd. in Sydney, wrote in a research note today.

To contact the reporter on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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