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Australian Dollar Surges as Jobs Gain, Commodities Advance

July 8 (Bloomberg) -- The Australian dollar jumped to a two-week high against the greenback as the nation added three times as many workers in June as economists estimated.

The New Zealand and Australian currencies advanced for a third day against the yen as commodities climbed, encouraging demand for currencies related to economic growth. The Aussie and kiwi extended gains after a U.S. report showed initial jobless claims dropped last week more than forecast.

“Certainly the Aussie will outperform,” said Tony Morriss, senior markets strategist at Australia & New Zealand Banking Group Ltd. in Sydney. “There’s still positive momentum in the domestic economy.”

The Australian dollar appreciated 0.9 percent to 87.20 U.S. cents at 11:42 a.m. in New York, from 86.43 cents yesterday. It touched 87.91 cents, the highest level since June 22. The Aussie rose 1.8 percent to 77.13 yen. New Zealand’s dollar advanced 0.4 percent to 70.57 U.S. cents, from 70.31 cents. The kiwi appreciated 1.2 percent to 62.42 yen.

Australia’s employment rolls rose by 45,900 in June, a statistics bureau report showed today. The median estimate of 22 economists surveyed by Bloomberg News was for an increase of 15,000. The jobless rate was 5.1 percent.

A strengthening job market may escalate pressure on inflation, which Reserve Bank of Australia Governor Glenn Stevens said on July 6 is likely to accelerate above the central bank’s target range.

Cash Target

The RBA left its overnight cash rate target at 4.5 percent for a second month and said consumer spending and business investment are expanding. Swaps traders are betting the RBA will raise its target rate by 0.13 percentage point over the next year, a Credit Suisse Group AG index shows.

“Far from the economy slowing from the weight of interest-rate rises, it’s actually accelerating,” said Adam Carr, a senior economist at ICAP Australia Ltd. in Sydney. “Clearly they’re going to hike again -- it’s just a question of when, with August still the best bet.

Initial claims for unemployment benefits in the U.S. decreased to 454,000 in the week ended July 3 from 475,000 in the previous week, the Labor Department reported. The median forecast of 36 economists in a Bloomberg News survey was for a drop to 460,000 from a previously reported 472,000.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Catarina Saraiva in New York at asaraiva5@bloomberg.net.

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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