By Candice Zachariahs Nov. 26 (Bloomberg) -- The Australian and New Zealand dollars advanced for a third day as the U.S. Federal Reserve committed $800 billion to unfreeze credit markets, prompting speculation that investors will buy higher-yielding assets. The currencies touched the highest in more than a week against the dollar after the U.S. announced a program to support lending to homebuyers, consumers and small businesses, reducing demand for the greenback as a safe haven. ``We've had a big move overnight on the back of the Federal Reserve announcement and the Aussie has come off a little bit since,'' said Amy Auster, head of foreign-exchange and international economics research at Australia & New Zealand Banking Group Ltd. in Melbourne. ``If we can hold above 63.15 cents, we're still in a rally phase,'' and the Australian dollar may advance toward 70 cents this week, she said. Australia's currency rose 1.3 percent to 64.54 U.S. cents as of 3:43 p.m. in Sydney from 63.68 cents late in Asia yesterday. It earlier touched 66.17 cents, the highest since Nov. 14. The currency advanced 0.7 percent to 61.41 yen. New Zealand's dollar gained 2 percent to 54.88 U.S. cents from 53.79 cents in Asia yesterday. The currency reached 55.88 cents, the strongest since Nov. 18. It bought 52.22 yen from 51.51. OECD Report Australia's economy will avoid a recession next year, helped by lower interest rates, government spending and exports, the Organization for Economic Cooperation and Development said. The economy will grow 1.7 percent in 2009 from 2.5 percent this year, before accelerating to 2.7 percent in 2010, the Paris-based group said. New Zealand's economy, already in recession, will contract 0.3 percent next year, it said. The Australian dollar, which traded at NZ$1.1771, will advance to NZ$1.22 by the first quarter and stabilize at NZ$1.235, wrote analysts at Bank of America Corp. Benchmark interest rates are 5.25 percent in Australia and 6.5 percent in New Zealand, compared with 0.3 percent in Japan and 1 percent in the U.S., attracting investors to the South Pacific nations' assets. The risk in such trades is that currency market moves erase profits. Australian government bonds advanced. The yield on the 10- year note declined nine basis points, or 0.09 percentage point, to 4.595 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 rose 0.733, or A$7.33 per A$1,000 face amount, to 105.314. New Zealand's two-year swap rate, a fixed payment made to receive floating rates, fell to 5.15 percent from 5.19 yesterday. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

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