By Candice Zachariahs Dec. 10 (Bloomberg) -- Australia’s dollar gained for a second day after a report showed employers added more than six times the number of jobs forecast by economists. New Zealand’s currency advanced on prospects for higher interest rates. The so-called Aussie rose after the statistics bureau said employers increased jobs for the third month in November, unexpectedly pushing down the unemployment rate to 5.7 percent. New Zealand’s dollar had its biggest two-day gain in a month after the central bank said it will raise rates sooner than previously indicated as a stronger housing market and commodity prices lead the economy out of recession. “Clearly unemployment has peaked at 5.8 percent and we think this is further testament to the momentum in the Australian economy and validates the RBA’s tightening cycle,” said Patrick Bennett, a foreign-exchange strategist at Societe Generale SA in Hong Kong. “Until we start to see the Reserve Bank of New Zealand tighten -- and we don’t believe that will be before the middle of the year -- we expect the Australian dollar to continue to outperform.” Australia’s currency climbed 0.4 percent to 91.23 U.S. cents as of 4:38 p.m. in Sydney from 90.86 in New York yesterday. It rose 0.5 percent to 80.20 yen. New Zealand’s dollar gained to 72.31 U.S. cents from 71.89 cents yesterday, when it jumped 1.7 percent. The currency advanced 0.6 percent to 63.56 yen. The kiwi touched NZ$1.2579 against the Australian dollar, the strongest since Nov. 20, before trading at NZ$1.2616, from NZ$1.2639 yesterday. The Aussie has been the best performer against the greenback among the 16 most-traded currencies over the past year and New Zealand’s dollar has been the fourth-strongest. Australian Jobs The number of people employed in Australia rose 31,200 in November, the statistics bureau said. The median estimate of economists surveyed by Bloomberg was for an increase of 5,000. Societe Generale forecasts Australia’s dollar will rise 10 percent to reach parity with the U.S. dollar by the first quarter of 2010, while New Zealand’s currency will add 6.4 percent to 77 cents, according to Bloomberg data. Benchmark interest rates are 3.75 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. Swaps traders are betting on 1.23 percentage points in rate increases in Australia and 2.21 points in New Zealand over the next 12 months, according to separate Credit Suisse AG indexes. ‘Remove Monetary Stimulus’ “If the economy continues to recover, conditions may support beginning to remove monetary stimulus around the middle of 2010,” New Zealand central bank Governor Alan Bollard said today, after leaving the official cash rate at a record low. New Zealand’s economy will expand 1.9 percent in the first quarter of 2010 from a year earlier, the bank said in forecasts published today. That’s faster than the 1.3 percent pace predicted in September. Annual growth will accelerate to 4.2 percent by the first quarter of 2011, the bank said. Annual consumer price inflation is expected to remain below 2 percent till early 2011, it said. “New Zealand as well as the global environment have continued to rebound and that’s necessitated a shift in the timing of the tightening cycle,” said Imre Speizer, a market strategist in Wellington at Westpac Banking Corp. “The statement was quite a bit more hawkish than expected.” Sell Aussie Investors should bet Australia’s dollar will fall versus New Zealand’s toward at least NZ$1.20, Commonwealth Bank of Australia and RBC Capital Markets said today. RBC advises exiting the trade on gains to NZ$1.2860 while CBA recommends placing a so-called stop at NZ$1.2885. The Aussie touched a six- month high of NZ$1.2842 on Dec. 3. “We anticipate the RBNZ will begin the tightening cycle with a 50 basis point lift in interest rates in April 2010,” Richard Grace, Sydney-based chief currency strategist at Commonwealth Bank of Australia, said in a research note. “New Zealand has historically had greater inflation challenges than Australia and so the RBNZ tends to be more aggressive.” New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, advanced to 4.57 percent from 4.39 percent on Dec. 7. Australian government bonds fell. The yield on the two-year government bond rose nine basis points to 4.48 percent. The yield on 10-year notes was little changed at 5.46 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 slipped 0.082, or A$0.82 per A$1,000 face amount, to 98.478. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

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