The Australian dollar rose to the strongest in seven months against the dollar and yen on speculation global equity markets will extend nine weeks of gains amid signs the global recession may be abating. New Zealand’s dollar climbed to the strongest since November as consumer spending on debit, credit and store cards rose for a third month in April. Australia’s dollar pared gains as traders speculated the currency may have risen too quickly. “The equity markets seem to just keep going,” said Amy Auster, head of foreign-exchange and international economics research at Australia & New Zealand Banking Group Ltd. in Melbourne. “You’d think after such a big move in the Australian dollar there would be a pullback, but it’s getting increasingly dangerous to trade that way.” Australia’s currency rose to 77.14 U.S. cents, the highest since Oct. 6, before buying 76.79 U.S. cents as of 1:13 p.m. in Sydney from 76.86 cents in New York on May 8. The currency jumped as high as 76.18 yen, also the most since October, and traded at 75.46 yen. New Zealand’s dollar advanced 1.1 percent to 61.06 U.S. cents and earlier traded at 61.12 cents, the strongest since Nov. 4. It gained 0.9 percent to 59.99 yen. The MSCI Asia Pacific index advanced for a sixth day as Asian banking stocks rose after Goldman Sachs Group Inc. recommended investors buy HSBC Holdings Plc as asset markets stabilize. Spending, Confidence New Zealand’s dollar advanced as the value of transactions on electronic cards at retailers increased 0.3 percent from March, when they rose a revised 0.4 percent, Statistics New Zealand said. Excluding spending at fuel outlets and workshops, transactions gained 0.5 percent. The Australian dollar ended six days of gains today after its 14-day relative strength index against the dollar climbed to 70.4, its second day above a reading of 70 that suggests a change in price direction is imminent. “A pullback will be pretty limited for now and take the Australian dollar back to 75 U.S. cents and if that’s as far as it goes we’re still in an uptrend,” said Auster. The Australian dollar may climb toward 78 U.S. cents, while New Zealand’s currency may advance to 61.65 cents over the next few sessions if stock markets continue to climb, she said. Australian business confidence was little changed in April with a sentiment index slipping 1 point to minus 14, after climbing in February and March, according to a National Australia Bank Ltd. The bank surveyed more than 400 companies between April 24 and April 30 and released its results in Sydney today. A figure below zero shows pessimists outnumbered optimists. Futures, Bonds Futures traders increased bets Australia’s currency will gain 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 an advance in the Australian dollar compared with those on a drop -- so-called net longs -- was 23,064 on May 5, compared with net longs of 16,692 a week earlier. The Australian dollar’s rally may peak at 80 U.S. cents this year, National Australia Bank and Australia & New Zealand Banking Group said today in separate research notes. Australian government bonds rose, ending two days of declines. The yield on 10-year notes fell four basis points, or 0.04 percentage point, to 4.93 percent, according to data compiled by Bloomberg. The price of the 5.25 percent security due March 2019 gained 0.33, or A$3.30 per A$1,000 face amount, to 102.50. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, fell to 3.54 percent from 3.58 percent on May 8.

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