The Australian dollar fell against all of its major counterparts and bonds gained after the nation’s employers unexpectedly cut workers in April. The so-called Aussie declined for a second day as investors lowered bets on central bank interest-rate increases after unemployment climbed in some states. New Zealand’s currency snapped two days of losses after an index of the manufacturing industry grew at a faster pace last month as the economy rebounding from a February earthquake. “With high fuel prices, a strong currency and concerns about taxation, you get the sense that this mixture of negatives is beginning to weigh on the manufacturing states,” said Robert Rennie, chief currency strategist in Sydney at Westpac Banking Corp. “Today’s data takes a bit of the shine and mystery off the Aussie dollar.” Australia’s currency fell to $1.0616 as of 4:28 p.m. in Sydney from $1.07 in New York yesterday and touched $1.0586, the least since May 6. It weakened 0.8 percent to 86 yen, extending yesterday’s 1.1 percent drop. New Zealand’s dollar traded at 79.03 U.S. cents from 78.90 cents, and rose to 64.04 yen from 63.95 yen. The yield on Australia’s two-year government bond dropped nine basis points, or 0.09 percentage point, to 4.96 percent, the biggest decrease since April 19. The number of people employed in Australia declined by 22,100, after a revised 43,300 gain in March, the statistics bureau said today. Economists in a Bloomberg News survey forecast a 17,000 increase in April. The jobless rate held at 4.9 percent. N.Z. Manufacturing Employment rose 22,900 in Queensland and Western Australia, states that are the biggest participants in the largest mining- investment boom in the country’s history. The number of jobs in New South Wales and Victoria, home to Australia’s two biggest cities, dropped by 56,200, today’s report showed. “In as much as the market was excitable over the chances of a June hike, today’s data do not support that case and are thus negative for the Australian dollar and supportive of bonds,” Michael Turner, an economist at RBC Capital Markets Ltd. in Sydney, wrote in a note to clients. “We had expected an August hike going into today’s data; the numbers have not shifted risks either way.” RBA Rates Traders are betting Reserve Bank of Australia Governor Glenn Stevens will increase the benchmark rate by 32 basis points over 12 months, down from 38 yesterday, according to a Credit Suisse Group AG index based on swaps. New Zealand’s dollar was boosted after the Performance of Manufacturing Index rose to 51.5 from 50.2 in March. A reading above 50 indicates manufacturing is expanding. The Australian and New Zealand dollars slid yesterday after the Reuters/Jefferies CRB Index of raw materials fell for the first time in three days. Commodities account for a majority of exports from the two nations. “Commodities still have some further weakness to come and that will drag on the Aussie and kiwi,” said Tim Kelleher, vice-president of institutional banking and markets at Commonwealth Bank of Australia in Auckland. The Aussie will find buyers near the $1.05 level while New Zealand’s currency will find support toward 78.50 cents over the next few days, he said. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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