The Australian dollar rose to a record before reports that economists said will show German producer prices and U.S. home sales increased, adding to signs the global recovery is gathering momentum. Australia’s currency gained for a second day against the greenback after a government report showed prices increased for the South Pacific nation’s exports, giving the central bank more reason to raise interest rates. The Australian and New Zealand dollars advanced versus the yen as gains in commodities, which comprise more than half of the nations’ exports, spurred demand for higher-yielding assets. “Economies globally seem to be recovering in a sustainable way,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp., a foreign-exchange margin company. “Sentiment may be ‘risk on,’ so high-yielding currencies could be bought.” Australia’s dollar rose to $1.0585 as of 2:53 p.m. in Sydney from $1.0526 in New York yesterday, after advancing to $1.0599, the strongest since it was freely floated in 1983. The currency gained 1 percent to 87.79 yen. New Zealand’s dollar advanced 0.5 percent to 79.30 U.S. cents, and strengthened 1 percent to 65.79 yen. German producer prices advanced 0.8 percent in March, after a 0.7 percent increase the prior month, the Federal Statistics Office will say today, according to a Bloomberg News survey. Purchases of existing U.S. homes rose 2.5 percent last month after dropping 9.6 percent in February, a separate survey showed before today’s report. Export Prices Australia’s export price index climbed 5.2 percent in the three months through March, the Bureau of Statistics said in Sydney. Economists surveyed by Bloomberg forecast a 5 percent increase. Import prices rose 1.4 percent, beating economists’ forecast for a 0.9 percent gain. The so-called Aussie is “likely to remain high,” Treasurer Wayne Swan said today at a media gathering in Brisbane. The Australian dollar has appreciated 4.5 percent over the past month in a measure of the currencies of 10 developed nations, according to Bloomberg Correlation-Weighted Currency Indexes. The New Zealand dollar has climbed 7 percent. Gold for immediate delivery rose to a record high of $1,500.43 per ounce, while crude oil for June delivery advanced 0.9 percent to $109.13 a barrel in electronic trading on the New York Mercantile Exchange. The MSCI Asia Pacific Index of shares climbed 1.3 percent. Rate Bets The Reserve Bank of Australia will raise its benchmark rate by 22 basis points during the next 12 months, a Credit Suisse Group AG index based on swaps showed. Traders were predicting 18 basis points of increases yesterday. “We continue to believe that the market is underpricing the likely degree of RBA official interest-rate increases this year,” John Kyriakopoulos, Sydney-based head of currency strategy at National Australia Bank Ltd., wrote in a research note today. This “could provide a trigger for further Australian dollar gains as traders ratchet up their rate-hike expectations.” Benchmark interest rates are 4.75 percent in Australia and 2.5 percent in New Zealand, compared with as low as zero in the U.S. and Japan, attracting investors to the South Pacific nations’ higher-yielding assets. Australian bonds fell with the benchmark 10-year yield rising four basis points to 5.53 percent, according to data compiled by Bloomberg. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, rose four basis points to 3.38 percent. To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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