By Candice Zachariahs Nov. 23 (Bloomberg) -- The Australian dollar ended four days of declines as Asian stocks rose and gold climbed to a record amid a weakening greenback. New Zealand’s also advanced. Australia’s currency gained versus the yen for the first time in six days as traders boosted bets the Reserve Bank of Australia will raise interest rates for a record third month on Dec. 1. The U.S. dollar fell versus 15 of the 16 major currencies as speculation the Federal Reserve will keep its stimulus measures in place spurred investors to bet on carry trades where low-cost funds are used to buy higher-yield assets. “We will see a continuation of the carry trade primarily against the U.S. dollar,” said Timothy Connors, head of foreign exchange at Custom House Global Foreign Exchange in Sydney. “There’s a lot of buying on dips, certainly on the Aussie dollar and perhaps even equities, which are off their highs and present really good buying opportunities.” Australia’s currency rose 0.5 percent to 91.93 U.S. cents as of 4:41 p.m. in Sydney from 91.47 cents in New York last week, when it fell 2 percent. It advanced 0.5 percent to 81.70 yen. New Zealand’s dollar gained 0.4 percent to 72.69 U.S. cents from 72.42 in New York last week, when it slid 2.6 percent. It climbed to 64.60 yen from 64.36. Benchmark interest rates are 3.5 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. The risk in carry trades is that currency market moves will erase profits. The Australian dollar may rise toward 92.20 cents, while New Zealand’s currency may advance to 73 cents, Connors said. Stocks, Gold The MSCI Asia Pacific Index excluding Japan climbed 0.6 percent as higher metal prices boosted mining companies. The London Metals Index, tracking the prices of copper, aluminum, lead, tin, zinc and nickel, gained 0.7 percent on Nov. 20. Gold, Australia’s third most-valuable raw material export, jumped to a record today, its sixth gain to an all-time high in two weeks, as investors sought an alternative to the U.S. dollar as a store of value. The “contagion” from record gold prices boosted the Australian dollar, said Darren Heathcote, head of trading at Investec Bank (Australia) Ltd. in Sydney. “There doesn’t seem to be much reason for Aussie to go much below 91 if at all at the moment. People will be happy to buy on dips.” Demand for the currency was also boosted with swaps traders betting on a 69 percent chance the RBA will raise its target rate by 25 basis points at its December meeting, according to a Credit Suisse Group AG index. The index indicated a 62 percent chance on Nov. 20. ‘Grind Higher’ Rates in Australia will “continue to grind higher” and may reach 4.25 percent by the first half of 2010, Jim Vrondas, a manager at the online foreign-exchange dealer OzForex Ltd. in Sydney, said in a Bloomberg Television interview. He recommended buying the so-called Aussie on declines “around the 90- to 91- cent level for a push above 94 cents later in the year.” The U.S. dollar slid after Fed Bank of St. Louis President James Bullard said the central bank should retain the flexibility to respond to economic weakness by extending beyond March its authority to buy mortgage-backed securities and agency bonds. Futures traders decreased bets the Australian dollar will gain against the U.S. currency for a fourth week, figures from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on an advance in the Aussie compared with those on a drop -- so-called net longs -- was 46,888 on Nov. 17, compared with net longs of 47,434 a week earlier. N.Z. Immigration New Zealand’s currency gained as annual immigration growth accelerated to the highest level in more than five years in October, adding to signs consumer spending and demand for housing may speed the economy’s recovery from a recession. The number of permanent migrant arrivals exceeded departures by 18,560 in the year ended Oct. 31, Statistics New Zealand said. That’s up from 17,043 in the 12 months through September and is the most since the period ended August 2004. Australian government bonds rose for a third day. The yield on 10-year notes fell six basis points, or 0.06 percentage point, to 5.38 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 gained 0.403, or A$4.03 per A$1,000 face amount, to 98.072. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, rose to 4.40 percent from 4.34 last week. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

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