Australia’s dollar headed for its 10th weekly advance, the longest winning streak since 2003, as global equities rallied after economic data signaled the world recession may be abating. New Zealand’s currency climbed. The Australian and New Zealand dollars rose for a sixth day after jobless numbers in both countries beat economists’ forecasts and stronger China manufacturing data stoked optimism the global recession is abating. Australia’s currency briefly pared gains as the Reserve Bank of Australia said the economy will shrink 1.25 percent in the 12 months through June. “The third quarter could see a global synchronized economic recovery coming in,” said Bill Belchere, an economist at Macquarie Securities Ltd. in Hong Kong, in a Bloomberg Television interview. “Commodity currencies will rally.” Australia’s dollar traded at 75.44 U.S. cents as of 4:04 p.m. in Sydney, up 3.3 percent from late on May 1 in New York. It touched a seven-month high of 76.16 cents yesterday after the jobless rate fell in April for the first time in eight months. The currency advanced for a second week against the yen, gaining 3.4 percent to 74.85 yen. New Zealand’s dollar climbed 4.2 percent this week to 59.38 U.S. cents and reached 59.89 cents yesterday, the most since Jan. 7. It bought 58.95 yen, a 4.3 percent weekly gain. Benchmark interest rates are 3 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. The risk in such trades is that currency market moves will erase profits. ‘Gradual’ Recovery The RBA today said the economy will expand 0.25 percent in the 12 months through June 2010, compared with its February prediction for a 1.25 percent expansion. “The economy is forecast to begin to grow from late 2009, although the recovery is expected to be gradual, partly reflecting the slow recovery in global demand,” the central bank said in its quarterly policy statement. The Australian dollar may drop 11 percent to 67 U.S. cents by year-end as the economy shrinks, Morgan Stanley said, moderating a previous forecast for the currency to slide to a six-year low of 55 cents. It also declined today as investors speculated the currency’s climb may have been overdone. The 14-day relative strength index for the Aussie against the dollar stood at 68. A reading above 70 suggests a change in price direction is imminent. “I certainly think the Aussie’s a little extended here, but if you want to sell it you’re basically taking a decision to stand in front of the risk rally,” said Adam Boyton, a senior currency strategist in New York at Deutsche Bank AG, the world’s largest currency trader. “Over the medium term it definitely heads lower again.” Bond Sales Australia today sold A$702 million ($528 million) of securities maturing March 2019 at a weighted average yield of 4.96 percent. The so-called bid-to-cover ratio at the auction was 3.8. Australian government bonds fell four days this week with the yield on 10-year notes adding 26 basis points, or 0.26 percentage point, to 4.94 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 slipped 0.16, or A$1.60 per A$1,000 face amount, to 102.52 today. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, fell to 3.58 percent from 3.61 yesterday.

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