The Australian dollar rose for a fourth day against the U.S. currency as gold, the nation’s third most-valuable export, climbed to the highest level in almost two months. New Zealand’s currency gained. The two currencies also advanced as Singapore said its economy shrank less than initially estimated last quarter, adding to signs the global recession may be easing. New Zealand’s dollar pared earlier losses after a report showed growth in immigration accelerated to a five-year high. “We’re seeing a pick-up in gold and silver” and that is boosting the Australian dollar, said Timothy Connors, head of foreign exchange at Custom House Global Foreign Exchange in Sydney. “Given the price movement and momentum over the past three days we’ll see the Aussie strongly move through 78 cents and up close to resistance at 79.80 cents.” Australia’s currency gained 0.1 percent to 77.60 U.S. cents as of 1:38 p.m. in Sydney from yesterday in New York, when it rose as high as 78.09 cents, the strongest level since Oct. 3. The currency declined to 73.32 yen from 73.54. New Zealand’s dollar advanced 0.5 percent to 60.88 U.S. cents and rose 0.1 percent to 57.51 yen. Gold for immediate delivery advanced for a third day, reaching $943.10 an ounce, the highest level since March 26. The metal has climbed 6.6 percent in the past month. Singapore’s gross domestic product contracted an annualized 14.6 percent last quarter from the previous three months, better than the government’s April 14 projection for a decline of 19.7 percent. ‘Any Improvement’ “Any improvement on bad expectations” will help commodity-based currencies, Custom House’s Connors said. Raw material shipments account for more than half the exports from Australia and New Zealand. New Zealand’s dollar strengthened for a fourth day after Statistics New Zealand said a net 2,160 permanent migrants arrived last month on a seasonally-adjusted basis, the most since January 2004. “The fact that migration continues to pick up is a good sign that it will provide a base of support for the housing market and the economy,” said Khoon Goh, a senior economist at ANZ National Bank Ltd. in Wellington. The local currency is likely to take “its cues from offshore and the Australian dollar,” he said. The Australian dollar has gained 10.4 percent this year on speculation the global recession is abating after it sank to a five-year low of 60.09 cents in October in the aftermath of the Lehman Brothers Holdings Inc. collapse. Carry Trades 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. “One reported use of the Australian dollar during the financial market turbulence in late 2008 was as a proxy for emerging-market currencies and assets,” the Reserve Bank of Australia said in its May Bulletin released today. The currency “could also have been used as a proxy for commodities that lack a liquid futures market,” the RBA said. Moody’s Investors Service today cut the rating of the Australian state of Queensland to Aa1 from Aaa. That follows Standard & Poor’s downgrade of the state and Queensland Treasury Corp. on Feb. 20. Australian Treasurer Wayne Swan offered to temporarily guarantee state bonds on March 25 to allow the states to raise funds for infrastructure plans as revenues fall. Australian government bonds rose, ending two days of losses. The yield on the benchmark 10-year notes fell two basis points, or 0.02 percentage point, to 5.04 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 slipped 0.173, or A$1.73 per A$1,000 face amount, to 101.570. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, rose to 3.49 percent from 3.47 yesterday.

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