Australia’s dollar fell versus its 16 major counterparts ahead of a report tomorrow forecast to show the unemployment rate rose to the highest in four years. The Aussie retreated from its strongest this month against the U.S. currency as Asian stocks fell, reducing demand for higher yielding assets. New Zealand’s dollar held its biggest gain in almost two weeks against the greenback after a successful milk powder auction reduced concern about a contamination recall in China. The Reserve Bank of Australia said it would monitor the economy to decide on further policy action when it cut the benchmark interest rate to a record 2.5 percent yesterday. “The general outlook for the Australian economy, despite what’s going on in the housing market right now, seems to be one of concern, particularly heading into tomorrow’s employment report,� said Jim Vrondas, the Sydney-based chief currency and payment strategist at OzForex Pty. “Given that the Aussie failed to sustain any move above 90 U.S. cents after the RBA, it’s only natural that we see markets start to sell off again.� The Aussie weakened 0.3 percent to 89.59 U.S. cents as of 12:20 p.m. in Sydney from yesterday, when it touched 90.05, the highest since July 31. The kiwi slipped 0.1 percent to 78.90 U.S. cents after climbing 1 percent yesterday. Australia’s currency bought NZ$1.1357 from NZ$1.1373 yesterday. The MSCI Asia Pacific index of stocks slumped 1 percent. Four-Year High Australia’s unemployment rate probably rose to 5.8 percent in July, from 5.7 percent the previous month, according to the median estimate of economists in a Bloomberg News poll. That would be the highest since August 2009. Home loan approvals in Australia rose 2.7 percent in June, from a revised 1.7 percent gain in May, the statistics bureau said today. Economists surveyed by Bloomberg predicted a 2 percent gain. Data yesterday showed the nation’s home prices increased 5.1 percent in the second quarter from a year earlier, also beating estimates. RBA Governor Glenn Stevens said in a statement yesterday following the rate cut that the board “will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the inflation target over time.� The reduction was the second this year, and extends an easing cycle that began in November 2011, when the benchmark rate was lowered from 4.75 percent. Australia’s dollar has fallen 11 percent over the past three months, the most among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. New Zealand’s dollar is the second-worst performer, with a 5.5 percent decline. Milk Prices Auckland-based Fonterra Cooperative Group Ltd. said whole-milk powder prices for delivery across all contracts through February fell 1.6 percent in an auction today, the first decline in two months. “What we saw from the auction was basically a vote of confidence in the New Zealand dairy industry, following the turmoil and fears we’ve seen over the past few days,� said Mike Jones, a currency strategist in Wellington at Bank of New Zealand Ltd. Fonterra said on Aug. 3 that a dirty pipe in one of its processing plants may have tainted whey protein with a bacteria that causes botulism. China, New Zealand’s largest trading partner, has imposed a ban on imports of whey powder and another dairy ingredient, threatening export ties. To contact the reporter on this story: Kevin Buckland in Tokyo at kbuckland1@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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