By Candice Zachariahs Sept. 23 (Bloomberg) -- The New Zealand and Australian dollars reached the highest since August 2008 after a New Zealand government report showed the economy unexpectedly grew, ending the country’s worst recession in three decades. Australia’s currency also climbed as prices of gold and crude oil, the nation’s third and fourth most-valuable commodity exports, ended three days of losses yesterday. New Zealand’s so- called kiwi touched its strongest in almost a year against the yen as two-year swap rates climbed to the highest since January after gross domestic product increased 0.1 percent in the three months to June 30, ending five quarters of contraction. “The kiwi GDP number this morning was strong and it helped to put the dollar on the back-foot,” said Phil Burke, chief FX dealer at JP Morgan Securities in Sydney. “The Aussie and kiwi both bounced.” New Zealand’s dollar surged as high as 73.12 U.S. cents, the most since August 2008, before trading 1.1 percent higher at 72.65 cents as of 3:29 p.m. in Wellington. It jumped as high as 66.27 yen, the most since October 2008, before buying 65.90 yen. Australia’s currency rose as high as 87.88 U.S. cents, the most since August 2008, and fetched 87.68 cents from 87.35 cents in New York. The currency was at 79.53 yen from 79.56 yen. The second-quarter’s 0.1 percent expansion followed a 0.8 percent drop in the first quarter, Statistics New Zealand said in Wellington today. The median estimate in a Bloomberg survey was for the economy to shrink 0.2 percent. Only three of 12 economists polled forecast a flat to positive reading. “It’s just eked out a positive gain which has brought New Zealand out of recession,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “With commodity prices having turned around lately we may well see the kiwi continue to press higher over the next six to 10 months.” Rates, Commodities Traders increased bets on gains in New Zealand interest rates to 1.51 percentage points over 12 months, from 1.36 yesterday, according to a Credit Suisse index based on swaps trading. New Zealand’s two-year swap rate, which is sensitive to expectations of interest rates changes, rose 11 basis points to 4.29 percent, the most since January. Benchmark interest rates are 3 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits. Australia’s dollar rose for a second day as the Reuters/Jefferies CRB Index of 19 raw materials commodities climbed the most in a week yesterday. Crude oil traded near $72 a barrel after rising 2.6 percent yesterday, while gold was little changed at $1,014.55 after yesterday ending three days of declines. Jobs, Forecast An index measuring the number of jobs available for skilled workers in Australia rose 1.2 percent in September from August, according to a report released by the Department of Education, Employment and Workplace Relations. National Australia Bank Ltd. raised its forecast for Australia’s dollar saying the currency is likely to extend this year’s 25 percent advance against the greenback to 89 U.S. cents by year-end. NAB had estimated the Aussie would reach 86 cents. “We have become even more bullish on the outlook for the Australian dollar,” John Kyriakopoulos, head of currency strategy at National Australia Bank Ltd. in Sydney, wrote in a note to clients. The bank expects a “peak of 93 cents in 2010 from our earlier forecast of 90,” he wrote. Australian government bonds fell for a second day. The yield on 10-year notes rose four basis points, or 0.04 percentage point, to 5.39 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 declined 0.314, or A$3.14 per A$1,000 face amount, to 98.985.

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