By Candice Zachariahs Dec. 9 (Bloomberg) -- The Australian dollar fell from close to a three-week high as local stocks declined and an industry report showed business confidence was at a record low. New Zealand’s dollar was little changed. Australia’s currency pared yesterday’s gains before a government report this week that may show unemployment rose to a one-year high in November. New Zealand’s dollar held onto gains against the dollar as the government announced NZ$4.4 billion ($2.4 billion) of income tax cuts and said it would spend more on road and school construction. “There’s a view that some of the gains we’ve seen will be hard to sustain for stock markets,” said Tony Morriss, a senior currency strategist at Australia & New Zealand Banking Group in Sydney. “You’d expect the Aussie, or the risk-sensitive currencies, to run into resistance at higher levels.” Australia’s currency fell 0.7 percent to 65.94 U.S. cents as of 2:26 p.m. in Sydney from late in Asia yesterday, when it touched 66.91 cents, the highest level since Nov. 14. The currency declined 1.3 percent to 61.17 yen. New Zealand’s dollar traded at 54.35 U.S. cents, from 54.28 yesterday. It fell to 50.41 yen from 50.61 yen. The Australian dollar declined as National Australia Bank Ltd. said its sentiment index for November fell one point to minus 30, the lowest level since the series began in 1989. The survey of more than 560 companies was conducted between Nov. 23 and Nov. 30. Jobless Rate The number of people employed in Australia may have fallen 15,000 in November, after gaining 34,300 the previous month, according to a Bloomberg News survey of economists before the statistics bureau’s Dec. 11 report. The unemployment rate may have climbed to 4.4 percent, the highest level since November 2007, from 4.3 percent, a separate Bloomberg survey showed. The New Zealand dollar was little changed as Governor- General Anand Satyanand said the government would introduce legislation to reduce personal tax rates from April 1 and indicated a “a step-up in infrastructure investment”. Government plans “that are going to build infrastructure and so need commodities have improved underlying sentiment toward these countries,” said Tony Allen, head of currency trading at ANZ National Bank Ltd. in Wellington. The UBS Bloomberg Constant Maturity Commodity index of 26 raw materials gained, ending six days of losses. Gold and crude oil, Australia’s third and fourth most valuable raw-material exports advanced. Raw materials account for 60 percent of Australia’s exports and 70 percent of New Zealand’s. Australian government bonds were little changed with the 10- year yield at 4.31 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 fell 0.078, or A$0.78 per A$1,000 face amount, at 107.754. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, rose to 4.77 percent from 4.75 yesterday. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net.

Source