Australian Dollar Advances for a Third Day


The Australian dollar rose for a third day on speculation the nation will maintain its 5.25 percentage point interest-rate advantage over the U.S.

The currency climbed to its highest this week after reports in the U.S. showed housing starts dropped to a 17-year low and industrial production slid, prompting traders to bet the Federal Reserve will delay raising borrowing costs. Australia's dollar also advanced as prices rose for the nation's commodity exports, including gold.

The Australian dollar bought 94.44 U.S. cents as of 9 a.m. in Sydney compared with 94.09 cents in late Asian trading yesterday. The currency traded at NZ$1.2484 from NZ$1.2456.

The Australian dollar pared gains yesterday after the central bank said in the minutes of its last meeting two interest-rate increases this year will slow growth and may be enough to cool inflation.

``As the Australian economy shows some signs of cooling, this could act as a limiting factor for short-term appreciation,'' said analysts led by Tom Fitzpatrick, global head of currency strategy at Citigroup in New York, in a research note.

Australia unexpectedly lost jobs in May, ending a record 18 months of gains and sending the nation's currency lower as traders reduced bets the central bank will raise its benchmark interest rate fro a 12-year high.


TradingEconomics.com, Bloomberg
6/17/2008 7:51:31 PM