The Australian dollar approached its highest in a week as equities climbed and central bank Governor Glenn Stevens said the global recovery may begin “towards the end of the year.” New Zealand’s currency also advanced. The so-called Aussie had its biggest gain this month against the dollar and yen yesterday as the Standard and Poor’s 500 index jumped 3 percent and a gauge of commodity prices rose. New Zealand’s dollar climbed today after the nation’s benchmark stock index, the NZX 50 Index, rose 0.6 percent. “Equity markets have had a pretty big rally from the lows over the past few months,” said Jim Vrondas, manager of corporate business at online foreign-exchange dealer OzForex Ltd. in Sydney. “The Aussie should stay pretty well supported and we may see a retest of 77.20 cents on the top-side.” Australia’s currency traded at 76.85 U.S. cents as of 2:24 p.m. in Sydney from 76.58 cents in New York yesterday when it gained 2.2 percent, the most since April 29. The currency bought 74.14 yen from 73.75 yen. New Zealand’s dollar advanced 0.6 percent to 59.85 U.S. cents and rose 0.8 percent to 57.75 yen. The so-called kiwi will likely trade between 58.30 and 60 cents this week, Vrondas said. Australia’s resilient banking system, a low rate of mortgage defaults and China’s demand for exports will aid the economy as a global recovery begins later this year, Reserve Bank of Australia Governor Stevens said in Sydney. RBA Minutes Central bank policymakers judged Australia’s economy is likely to “record better outcomes than most other advanced economies in 2009 and 2010,” according to the minutes of the RBA’s May 5 meeting released today. The bank held its benchmark interest rate at 3 percent at that meeting, compared with 0.1 percent in Japan and as low as zero in the U.S. The South Pacific nations’ currencies surged yesterday as equities rallied on speculation the worst of the global financial crisis may be over. Goldman Sachs, JPMorgan Chase & Co. and Morgan Stanley applied to repay the combined $45 billion they received from the U.S. government, according to people familiar with the matter. The Australian dollar faces a “key test” at 77.15 U.S. cents with breaks above this level opening up “a closer test of the 78.75 to 79 U.S. cent zone,” Niall O’Connor, a New York- based currency technical analyst at JPMorgan Chase & Co., wrote in a research note to clients. The New Zealand dollar may see “additional upside” after holding above its 200-day moving average, he wrote. Australian government bonds fell, ending four days of gains. The yield on 10-year notes rose 12 basis points, or 0.12 percentage point, to 4.97 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 slipped 0.92, or A$9.20 per A$1,000 face amount, to 102.12. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, fell to 3.42 percent from 3.43 yesterday.

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