Australian Dollar Heads for Weekly Advance

The Australian dollar headed for a second weekly advance on speculation the central bank will signal it is concerned about inflation in a monetary policy statement today., Bloomberg 5/8/2008 6:50:28 PM

Australia's currency is trading near its highest since August 2006 after a report yesterday showed job gains for a record 18th month.

The Australian dollar traded at 94.44 U.S. cents as of 8:17 a.m. in Sydney from 94.20 cents in late Asian trading yesterday and 93.47 a week ago in New York.

Australia's dollar bought NZ$1.2220 after gaining 1.5 percent yesterday when it reached NZ$1.2241, the most since Aug. 7, 2006. It will reach NZ$1.31 in coming months, Trinh said.

The Reserve Bank of Australia kept rates at a 12-year high of 7.25 percent this week following two increases in February and March on concern a tight labor market will push up wages and stoke inflation, already at the highest rate since 1991.

Australian 10-year government bonds yield 6.29 percent, up from 6.23 percent a week ago. A basis point is 0.01 percentage point and bond yields move in the opposite direction to prices.

Australian Dollar Heads for Weekly Advance