Rates At 0630 GMT Latest Change AUD/USD 0.9775 +1.4% AUD/JPY 74.87 +1.11% 6.50% May, 2013 3.6694% +0.0694 bps 4.50% Mar, 2020 4.1976% +0.0945 bps 10-Yr Spread To U.S. +217 bps -10 bps SFE Dec 3-Year Futures 96.40 -0.08 bps SFE Dec 10-Year Futures 95.705 -0.105 bps SYDNEY (Dow Jones)--The Australian dollar Friday climbed to its highest level in a week, riding what some traders dubbed a "Santa Claus" rally which could see the currency sustain solid gain over the final weeks of the year. Rising confidence in the ability of euro-zone policy makers to navigate a path through the bloc's sovereign debt crisis and recent signs of the U.S. economy having a faster pulse has buoyed sentiment toward the Australian dollar, a traditional risk barometer in world financial markets, currency traders said. The turnaround has come despite global bank Goldman Sachs earlier this week downgrading growth prospects for various countries, including Australia. The more exuberant mood, which has seen the Aussie dollar rise from 1-year lows on Tuesday, could still be popped if U.S. payrolls data for September released later today disappoints, traders warned. At 0630 GMT, the Australian dollar was at US$0.9775, up from US$0.9640 late Thursday. Against the Japanese yen, the currency changed hands at Y74.87, up from Y74.045. Some of the Australian dollar's revival is also linked to its sharp decline last week, which provided investors with unexpectedly low and attractive levels from which to reenter positions, traders said. Arab Bank senior trader David Scutt said the climb of the Australian dollar is a classic "Santa Claus" rally, taking the currency higher ahead of Christmas when markets in many countries fall silent. Scutt expects the Australian dollar will at least return to US$0.9925, but warned a push back above parity would invite heavy selling. "It's clear there are growing hopes that we may get a year-end rally," he said. Euro-zone leaders are "starting to get their act together," he added. National Australia Bank senior currency strategist Emma Lawson said the mood could swing if U.S. payrolls data don't provide a ray of hope for the weakened U.S. economy. "It will last as long as payrolls are positive and most importantly the unemployment rate moves lower." Economists expect non-farm payrolls to have increased by 60,000 last month, a bounce from no growth in August. They expect the unemployment rate to remain at 9.1%. CMC Markets senior trader Tim Waterer said momentum is strong and more gains can be expected, but he too said a poor payrolls "could be a game changer." "Momentum was key on the way down. With some better developments out of Europe, we are seeing it play a role on the upswing," he said. -By James Glynn, Dow Jones Newswires; 61-2-8272-4685; james.glynn@dowjones.com

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