Australia’s dollar declined for the first time in three days after a government report showed the nation’s employers unexpectedly cut jobs in December. The so-called Aussie fell against all 16 of its most-traded peers before a Jan. 25 report on consumer prices that may prompt investors to increase bets on an interest-rate cut from the Reserve Bank of Australia next month. New Zealand’s dollar, nicknamed the kiwi, slid from the highest level in 11 weeks after data showed consumer prices unexpectedly dropped in the fourth quarter. “The knee-jerk reaction was to take the Aussie dollar lower,� said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “We’ll probably need to see a weakish looking CPI number next week to really make the case for a cut from the RBA.� Australia’s dollar fell 0.3 percent to $1.0400 at 2:47 p.m. in Sydney. It declined 0.5 percent to 79.80 yen. The New Zealand dollar slid 0.2 percent to 80.32 U.S. cents from yesterday in New York, when it climbed as high as 80.82, the most since Nov. 1. It dropped 0.3 percent to 61.63 yen. The number of people employed in Australia fell by 29,300, the statistics bureau said today. That compares with the median estimate for an increase of 10,000 in a Bloomberg News survey of 23 economists. The jobless rate held at a revised 5.2 percent. RBA Policy Traders are betting that RBA Governor Glenn Stevens will lower rates for a third-straight meeting when policy makers meet on Feb. 7, with a Credit Suisse Group AG index based on swaps indicating an 85 percent chance that the benchmark will be cut by a quarter of a percentage point. Australia’s 10-year bond yield fell two basis points, or 0.02 percentage point, to 3.74 percent. Higher benchmark lending rates of 4.25 percent in Australia and 2.5 percent in New Zealand, compared with near zero rates in the U.S. and Japan, attract investors to the two South Pacific nations’ assets. The risk in such trades is that currency market moves will erase profits. New Zealand’s currency dropped against the dollar and yen, ending a two-day rally, after a statistics bureau report showed consumer prices declined 0.3 percent in the fourth quarter from the previous three-month period, when they advanced 0.4 percent. N.Z. Rates “There are no inflation pressures in New Zealand at the moment and that means the Reserve Bank can do nothing for even longer than it intended,� said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., Australia’s second-largest lender. “It’s kiwi dollar negative and also negative for shorter-maturity yields.� There is a 44 percent chance that the Reserve Bank of New Zealand will implement a 0.25 percentage point rate cut by April, according to swaps prices from Westpac. The bank forecast no change in fourth-quarter consumer prices, the lowest estimate in a Bloomberg survey of economists with a median prediction of a 0.4 percent increase. Declines in Australia’s dollar were limited as signs the the U.S. economy is gaining momentum boosted demand for higher- yielding assets. The MSCI Asia Pacific Index of regional stocks rose 1 percent, advancing for a third day. “The overwhelming theme in currency markets at the moment is a greater willingness to take risk and the Australian dollar has been a beneficiary of that,� said Andrew Salter, a currency strategist at Australia & New Zealand Banking Group Ltd. in Sydney. “That approach from global investors has been based on a cyclical recovery in the U.S. especially.� Initial jobless claims in the U.S. probably decreased to 384,000 in the week ended Jan. 14 from 399,000, according to the median estimate in a Bloomberg survey of economists before the figures are released today. Factory output climbed 0.9 percent last month, the biggest increase since December 2010, Federal Reserve data showed yesterday. 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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