The Australian and New Zealand dollars strengthened versus their U.S. and Japanese peers, as Asian stocks reversed earlier losses, supporting demand for higher-yielding currencies. Australia’s currency recovered from declines as Standard & Poor’s 500 index futures advanced and after a report showed job vacancies rose in the three months to August. The New Zealand dollar, nicknamed the kiwi, rallied as Governor Alan Bollard said the country’s Reserve Bank is in a better position than many peers to respond to any potential fallout from economic problems in Europe and the U.S. The South Pacific currencies are “tracking S&P futures,” said Sue Trinh, a senior strategist at Royal Bank of Canada in Hong Kong. “With the reversal from negative to positive territory, that has seen risk proxies like the Aussie and the kiwi reverse to their session highs.” The Australian dollar rose to 98.29 U.S. cents at 5:20 p.m. in Sydney from 97.81 cents in New York yesterday, after earlier dropping as low as 97.02 cents. It bought 75.19 yen from 74.93 yen, after touching 74.15 yen. New Zealand’s currency rose to 77.98 U.S. cents from 77.67 cents and was at 59.65 yen from 59.50 yen. It previously weakened to 77.06 cents and 58.89 yen. The MSCI Asia Pacific Index of shares gained 0.4 percent, after earlier falling as much as 1.3 percent. S&P 500 index futures gained 1 percent. Australian job vacancies rose 3.2 percent in the three months to August from the quarter before, a government report showed today in Sydney. That was the first increase since the period ended November. ‘Too Much Bearishness’ “On a three-to-six-month period, I would say that Aussie down here represents value,” Trinh said. “There is too much bearishness priced into the Australian interest-rate curve. From that perspective, Aussie does look a little bit oversold.” The Australian currency’s 14-day relative strength index was at 33.8 against the dollar and 33.2 versus the yen, near the 30-level that some traders see as signaling an asset’s price may reverse direction after falling too rapidly. Traders are betting that the Reserve Bank of Australia will cut its cash target by at least 50 basis points by the end of the year, cash-rate futures show. RBA Governor Glenn Stevens has kept the developed world’s highest benchmark borrowing rate unchanged at 4.75 percent this year. New Zealand’s dollar snapped yesterday’s decline against the dollar and the yen as Governor Bollard said the country’s central bank is “comfortable” amid concern that Europe will struggle to resolve its debt crisis. ‘Reasonably Sweet’ Spot “From a monetary policy point of view, New Zealand is in a reasonably sweet sort of spot because we can move rates when we need to,” Bollard told Radio New Zealand’s Nine-to-Noon today. “We’re comfortable where things are. We think we are going to have to push them up as we get more housing sector recovery but we’ve got time to wait and watch on that.” Bollard this month held the bank’s official cash rate at a record-low 2.5 percent for a fourth-straight meeting, saying worsening global economic and financial risks made it prudent to stay on hold. Swaps traders are pricing in a 27 basis-point increase in the rate over the next 12 months, a Credit Suisse Group AG index showed. The Australian and New Zealand currencies have depreciated 2.5 percent and 2.6 percent respectively in the past month, the worst performers after the Swiss franc among the 10 devleoped- nation currencies tracked by Bloomberg Correlation-Weighted Indexes. Australia’s benchmark 10-year yield dropped three basis points, or 0.03 percentage point, to 4.26 percent. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, fell to 3.1 percent from 3.12 percent. To contact the reporters on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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