By Candice Zachariahs Nov. 3 (Bloomberg) -- The Australian and New Zealand dollars rose as Australian stocks advanced on anticipation interest-rate cuts worldwide will bolster global economic growth. The currencies advanced against the yen as Australia's S&P/ASX 200 Index gained for the fourth day, its longest winning streak since Aug. 12. Economists forecast the Reserve Bank of Australia will reduce its benchmark rate to 5.5 percent tomorrow after house prices fell in the third quarter and manufacturing contracted at a record pace in October. ``The Aussie dollar has been following equity markets quite closely on global risk sentiment,'' said Jim Vrondas, manager of corporate business at online foreign-exchange dealer OzForex Ltd. in Sydney. ``If other Asian equity markets rally we might see a bit of late Asian, early European buying of the Aussie.'' Australia's currency rose 3.2 percent to 68.25 U.S. cents as of 5 p.m. in Sydney from 66.79 cents late in New York Oct. 31. The currency advanced 3.3 percent to 67.88 yen. New Zealand's dollar gained 1.9 percent to 59.36 U.S. cents from 58.27 in New York last week. It bought 59.1 yen from 57.38. The currencies advanced as Australian equities including BHP Billiton Ltd., the world's largest mining company advanced 4.6 percent and Rio Tinto Group, the third-biggest metals producer, gained. Raw materials account for 60 percent of Australia's exports and 70 percent of New Zealand's overseas shipments. Interest Rates The RBA will lower interest rates 50 basis points, or 0.5 percentage point, according to 15 of 16 economists surveyed by Bloomberg News, joining policy makers in the U.S., Japan and China, who announced lower borrowing costs last week. An index measuring the weighted average of prices for established houses in the nation's eight capital cities dropped 1.8 percent from the June quarter, according to a government report. Australia's manufacturing index fell 6.8 points from September to 40.4, the lowest level since the index was started in 1992, an industry report showed. New Zealand's dollar advanced after Finance Minister Michael Cullen said Nov. 1 that the government will guarantee overseas debt sales by the nation's banks to help maintain access to international wholesale funding. The Australian dollar has fallen 17 percent versus the yen and 12 percent against the dollar over the past month as the collapse of Lehman Brothers Holdings Inc. led to a freeze in lending that spurred investors to dump equities on concerns the world economy is headed for a recession. Shorts, Bonds Futures traders last week increased their bets that the Australian dollar will decline against the U.S. dollar, 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 a decline in the Australian dollar compared with those on a gain -- so-called net shorts -- was 9,819 on Oct. 28, compared with net shorts of 7,234 a week earlier. Australian government bonds declined. The yield on the 10- year note gained 23 basis points, or 0.23 percentage point, to 5.39 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 was lower by 1.775, or A$17.75 per A$1,000 face amount, at 98.862. New Zealand's two-year swap rate, a fixed payment made to receive floating rates, fell to 6.318 percent from 6.340 on Oct. 31. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

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