The Australian and New Zealand dollars advanced against the greenback as U.S. stock futures rose, spurring demand for higher-yielding assets. The so-called kiwi rallied from yesterday’s 3.3 percent decline versus the yen after prices of commodities gained. Australia’s currency rose for the second time in 11 days against its U.S. counterpart even after a report showed the nation’s jobless rate increased by the most since October. “The market is probably seeing the U.S. has sold off so hard overnight, so we could probably see a bit of a bounce,” said Thomas Harr, head of Asian currency strategy at Standard Chartered Plc in Singapore. “It does seem that we are starting to see some stabilization in currency markets. That is providing some support for the Aussie and the kiwi.” Australia’s dollar rose to $1.0271 at 3:45 p.m. in Sydney from $1.0178 yesterday. The so-called Aussie traded at 78.65 yen from 78.23 yen. New Zealand’s currency bought 82.16 U.S. cents from 81.12 cents. It gained to 62.92 yen from 62.35 yen. Standard & Poor’s 500 futures expiring in September increased 1.7 percent, signaling a rally from yesterday’s 4.1 percent plunge. The Thomson Reuters/Jefferies CRB Index of raw materials advanced 1.4 percent yesterday. New Zealand’s currency maintained gains after data showed consumer confidence rose. The sentiment index increased to 113.3 this month from 109.4 in July, according to figures from Australia & New Zealand Banking Group Ltd. and Roy Morgan Research released in Wellington today. Australian Employment Australian unemployment jumped to 5.1 percent in July from 4.9 percent a month earlier, the first increase since October, the statistics bureau said in Sydney today. The number of workers fell by 100 after a revised 18,200 gain in June. That compares with the median estimate for 10,000 additional jobs in a Bloomberg News survey of 25 economists. The Australian dollar snapped yesterday’s 1.4 percent gain versus its New Zealand counterpart on speculation today’s jobs report will spur the Reserve Bank of Australia to lower rates. Today’s report is “compounding the case for potential rate cuts going forward by the RBA,” said Thomas Averill, a director in Sydney at Rochford Capital, a currency and interest-rate risk management company. “With very, very soft economic conditions in Europe and the United States and signs that China may be slowing, the case is building for a cut.” Rate Expectations Traders see a 100 percent chance of at least a 25-basis- point rate cut from the RBA at its September meeting, according to a Credit Suisse AG index based on swaps. That compares with a 16 percent chance for a 25-basis-point increase in borrowing costs from the Reserve Bank of New Zealand when it meets next month, a separate index showed. Goldman Sachs & Partners Australia Pty predicts the RBA will lower interest rates by as much as 50 basis points before year end, after previously forecasting it would hold rates before raising them by 25 basis points in the first quarter of 2012. Deutsche Bank AG said it expects the RBA to cut its cash rate to 4.25 percent by the end of this year, reversing from an earlier forecast for an increase in borrowing costs in November. HSBC Holdings Plc economist Paul Bloxham, a former RBA official, said he still predicts the next move in rates will be higher. Volatility in financial markets is a “clear downside risk” to HSBC’s estimate that the RBA will boost borrowing costs in the fourth quarter, Sydney-based Bloxham said in an e- mailed note. Yields on Australia’s three-year debt fell 11 basis points to 3.78 percent, after a 69-basis-point drop to 3.67 percent last week, the biggest slide since February 1993. Ten-year yields declined to 4.46 percent from 4.59 percent yesterday. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, rose six basis points to 3.3 percent. To contact the reporter on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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