Australia Dollar rises as employers add more jobs than economists forecast

The Australian dollar strengthened against all its major counterparts after a government report showed employers added more than twice as many jobs as economists' forecasts.

Australia's currency gained for the first time in four days against the dollar as the extra yield bonds of the South Pacific nation to offer over Treasuries widened and traders added to bets the Fed will increase rates interest. New Zealand dollar fell for a second day against Australia after the country's central bank said smaller borrowing costs will likely increase "in a more limited extent" in the next two years.

"This is a significant finding and supports the Australian dollar," said Robert Rennie, chief currency research in Sydney at Westpac Banking Corp., the second largest bank in Australia. "The market is more or less full price for a hike in September next year, today's data suggests that you might want to start bringing that forward."

Australia's currency rose 0.7 percent to 98.65 U.S. cents as of 16:17 in Sydney from New York yesterday, after weakening 1.4 percent in the last three days. The so-called Aussie gained 0.4 percent to 82.66 yen, and appreciated by 0.6 percent to NZ $ 1.3181.

New Zealand dollar advanced 0.1 percent to 74.85 U.S. cents and traded at 62.71 yen from 62.82 yen.

Australia's currency rallied after the statistics bureau said employers added 54,600 workers in November, reducing the unemployment rate to 5.2 percent from 5.4 percent in October. Economists expect 20,000 new jobs, according to a survey.

Rate Outlook

Reserve Bank of Australia Governor Glenn Stevens increased the benchmark rate by 41 basis points over the next 12 months, compared to an expected 24 basis points late last week, according to the rate of Credit Suisse AG.

The extra yield investors get from the celebration of Australia notes two years rather than Treasuries of similar date was extended 16 basis points to 4.38 percentage points, the biggest increase since October 7.

New Zealand dollar fell to a six-week low against Australia as economists at Bank of New Zealand Ltd. and TD Securities Inc. downgraded its predictions for when the RBNZ will raise rates.

The kiwi fell as low as NZ $ 1.3179 per Australian dollar, the weakest since Oct. 27.

Governor Alan Bollard left unchanged the rate of New Zealand's benchmark by 3 percent, saying the country's worst earthquake in 80 years may slow economic growth in the short term.

'It provides for an increase "

"Interest rates are now expected to grow in a more limited extent in the next two years that points in the September statement," Bollard said in today's statement accompanying the political decision. "Downside risks to global growth and export prices persist."

The central bank estimates that the average bank's performance to three months will be little change until the second quarter and expected to rise to 3.8 percent by the end of 2011, down from 4.1 percent projected in September.

"The currency has been high inhibition of recovery, and the general tone of the bollard was pessimistic," said Tim Kelleher, vice president of institutional banking and markets in the Commonwealth Bank of Australia in Auckland. The kiwi may undermine 73.75 U.S. cents, he said.

The nation's rate of exchange of two years, a fixed payment made to receive floating rate that is sensitive to the expectations of the policy, was at 3.84 percent, after falling to 3.80 percent after the decision rate, the lowest since Oct. 28.