Australian Dollar Gains

The Australian dollar rose after a government report showed business investment increased almost three times as much as economists estimated in the second quarter.

Australia's dollar advanced for a second day on speculation the economy will be resilient enough to warrant fewer central bank interest-rate reductions than earlier forecast.

The Australian dollar climbed 0.7 percent to 86.76 U.S. cents at 4:48 p.m. in Sydney, from 86.05 cents before the report and 86.18 cents late in Asia yesterday. It reached 84.94 cents on Aug. 26, the lowest since Sept. 20. The currency strengthened 0.7 percent to 94.48 yen from 93.78 yen.

Australia's currency trimmed this week's loss against the U.S. dollar to 0.2 percent after the Bureau of Statistics said in Sydney that capital spending rose 5.7 percent from the previous three months, when it gained a revised 1 percent.

Benchmark rates in Australia and those of 8 percent in New Zealand compare with 2 percent in the U.S. and 0.5 percent in Japan, making the two South-Pacific nations popular destinations for international investors seeking higher returns.

Australian Dollar Gains, Bloomberg
8/28/2008 6:50:32 AM