The Australian dollar gained for a 10th day, its longest winning streak since October 2007, and the New Zealand currency also rose as stocks rallied on optimism U.S. plans to keep borrowing costs low will boost growth in the world’s largest economy. New Zealand’s dollar extended last week’s advance, its biggest since 1987, after the Federal Reserve said March 18 it will buy $300 billion of U.S. government bonds to hold down yields. Benchmark interest rates are 3 percent in New Zealand and 3.25 percent in Australia, the highest among the major industrialized nations. The Fed’s move is a “support to risk appetite,” said Patrick Bennett, Asia foreign-exchange strategist in Hong Kong at Societe Generale, France’s third-largest bank. “In the wake of what the Fed did we look at currencies where deflation risks are low and the scope for quantitative easing is low and expect those currencies to outperform in the near-term.” Australia’s currency rose 0.9 percent to 69.31 U.S. cents as of 12:56 p.m. in Sydney, from 68.69 cents late in New York last week. The currency advanced 1.2 percent to 66.65 yen. New Zealand’s dollar gained 0.7 percent to 56.27 U.S. cents, and strengthened 1 percent to 54.12 yen. Australia’s dollar may rise towards 72.80 cents while New Zealand’s currency may gain to as much as 60.50 cents over the next few weeks, Bennett said. Stocks Rise The South Pacific nations’ currencies traded near the highest in more than two months versus the U.S. dollar as the MSCI Asia Pacific Index of regional shares added 2 percent and Australia’s S&P/ASX 200 Index advanced 1.4 percent. They also gained before the announcement of a U.S. government plan to remove toxic assets from banks’ balance sheets this week. U.S. Treasury Secretary Timothy Geithner intends to expand the Fed’s $1 trillion Term Asset-Backed Securities Loan Facility to buy frozen assets, according to unidentified people familiar with the proposal. “How stock markets react to the latest bank support plan will be an important influence on currencies this week,” John Kyriakopoulos, Sydney-based head of currency strategy at National Australia Bank Ltd., wrote in a research note. “Resistance will be fierce at around 70.50 U.S. cents although many traders will target the year-to-date high of 72.68 cents.” Futures traders cut bets the Australian dollar will decline against the U.S. dollar, figures from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers by hedge funds and other large speculators on a decline in the Australian dollar compared with those on a gain -- so-called net shorts -- was 419 on March 17, compared with net shorts of 3,945 a week earlier. Australian government bonds fell for the second day. The yield on 10-year notes rose six basis points, or 0.06 percentage point, to 4.22 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 slipped 0.409, or A$4.09 per A$1,000 face amount, to 108.285. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, rose to 3.49 percent from 3.44 percent on March 20.

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