Australia’s dollar was little changed, heading for its first weekly drop since February, on concern the global slump will push the jobless rate to the highest in seven years. Australia’s currency slid against the U.S. dollar as Prime Minister Kevin Rudd said the nation’s first recession in almost two decades will cut tax receipts by more than A$115 billion ($82 billion). New Zealand’s dollar fell for a third week before a central bank meeting on April 30 at which economists expect policy makers will cut benchmark rates from a record low. “Through to mid-April everything looked optimistic and colorful, but sentiment is changing now,” said Daisuke Uno, chief bond and currency strategist at Sumitomo Mitsui Banking Corp. in Tokyo. “There’s speculation that employment figures will be bad, which may be weighing on the Aussie dollar.” Australia’s dollar traded at 71.43 U.S. cents as of 12:55 p.m. in Sydney from 71.48 cents yesterday and 72.25 cents on April 17 in New York. It was at 69.55 yen from 70.01 yen yesterday, heading for a 2.9 percent decline for the week. New Zealand’s currency traded at 56.36 U.S. cents from 56.17 cents yesterday and 56.80 cents a week ago. It declined to 54.87 yen from 55.02 yen. The Australian dollar has fallen against all of the 16 most-traded currencies this week as the IMF said the central banks of Australia and New Zealand can cut interest rates further to cushion their economies from the global recession. Jobless Concerns Unemployment will reach 6.5 percent by the end of this year, according to a Bloomberg News survey of economists. The jobless rate jumped to 5.7 percent last month, increasing at the fastest pace since the nation’s last recession in 1991. Australia’s currency may decline toward 69.5 U.S. cents next week and the New Zealand dollar is likely to drop to 54.90 cents or lower next week, said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Sentiment has definitely changed over the past week or so as people become more realistic about the fact that the world is still in recession and there’s no quick fix,” she said. “The currencies may edge back down after recent strength, with the New Zealand central bank set to cut rates and any Australian recovery likely to be a slow grind. The risks remain to the downside.” Australia’s central bank Governor Glenn Stevens cut his benchmark lending rate this month to a 49-year low of 3 percent, the same level set on March 12 by Alan Bollard, who heads the Reserve Bank of New Zealand. Both economies will contract this year before expanding again in 2010, the IMF predicts. ‘Slump in Demand’ The nation’s currency gained 1.6 percent this year against the greenback amid optimism a revival in China will push up demand for commodities such as iron ore that account for more than half of Australia’s exports. “We have seen some improving signs out of China,” said Sharada Selvanathan, a currency strategist at BNP Paribas SA in Hong Kong. “The markets are taking that as a very positive factor to help drive the Aussie higher.” New Zealand’s dollar fell this week against 15 of the 16 most-traded currencies before next week’s central bank meeting. Policy makers will lower the official cash rate by 0.5 percentage point to 2.5 percent, according to nine of the 11 economists surveyed by Bloomberg. The other two expect a 0.25 percentage point reduction. “The slump in demand in the U.S. and Asia and the drop in commodity prices are weighing on activity,” the IMF said this week. “Households are also suffering wealth reduction as equity markets and, to a lesser extent, house prices have fallen after rapid rises through 2007.” Bonds Drop Australia’s bonds fell for a third day on concern the drop in revenue will push up government borrowings. The yield on the benchmark 10-year bond climbed four basis points to 4.53 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security maturing in March 2019 declined 0.321, or A$3.21 per A$1,000 face value, to 105.677. A basis point is 0.01 percentage point. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, declined for a third week to 3.62 percent from 3.68 percent on April 17.

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