Australian Dollar Advances as Traders Trim Bets on Rate Cuts

The Australian dollar traded near
the peak degree in five hebdomads against the U.S. currency as
traders pared stakes on the cardinal depository financial institution film editing involvement rates
from a 12-year high this year.

The currency approached its strongest in seven weeks
against the hankering before a study tomorrow that economists
forecast will demo the Modesty Depository Financial Institution of Australia's measurement of
core rising prices rose to a 16-year high. Australia's dollar added
to additions made yesterday after authorities figs showed producer
prices increased by a record in the first quarter.

''The Aussie dollar could raise a small additional today
ahead of the'' rising prices report, said , a currency
strategist at Commonwealth Depository Financial Institution of Commonwealth Of Australia in Sydney. ''We
certainly believe there are upside hazards to the consumer price
index. We anticipate some reaction by the dollar.''

The Australian dollar rose to 94.32 U.S. cents as of 8:46
a.m. inch Sydney from 94.12 in late Asiatic trading yesterday. It
reached 94.44 cents, the most since March 17. The currency
advanced to 97.43 hankering from 97.19 yesterday. It may excel the
23-year high of 94.98 cents tomorrow, Capurso said.

The Modesty Depository Financial Institution of Commonwealth Of Australia have raised involvement rates
twice this twelvemonth to 7.25 per centum to chill inflation, 5 percentage
points higher than the U.S. benchmark. Reports this month
showing home-loan blessings slumped by the most in four old age in
February and consumer assurance slid in April to the lowest
since 1993 prompted guess the RBA would cut down rates.

Interest-Rate Bets

Investors have got pared stakes on the size of potential
interest-rate cuts, according to a Recognition Switzerland Group
based on trading in interest-rate swaps. Traders anticipate the RBA
will take down the benchmark charge per unit by 21 footing points, or 0.21
percentage point, in the adjacent 12 months, the index showed. At
the start of this month, they calculate 54 footing points of cuts. The adjacent charge per unit determination is owed on May 6.

The consumer terms index rose 1.1 percentage from the fourth
quarter, when it gained 0.9 percent, according to the median
estimate of 22 economic experts surveyed by Bloomberg News. The
central bank's measurement of core yearly rising prices rose to the
highest in 16 years, according to the survey. The releases the figs at 11:30 a.m. inch Sydney tomorrow.

Demand for options that protect against a driblet in the
Australian dollar versus the U.S. currency is at the lowest
level since August, when the collapse of the subprime mortgage
market triggered a planetary recognition squeeze.

Risk-Reversal Rate

The insurance premium for Australian dollar one-month put options --
which let the right to sell relative to calls, which allow
purchases -- was 0.59 per centum point yesterday. That's less
than one-half of what it was three calendar months ago. The so-called risk-
reversal charge per unit is now a one-tenth of the 5.75 per centum points it
reached in August. The Australian dollar, also known as the
Aussie, have gained 4.4 percentage versus the dollar and 8.3 percent
against the Nipponese hankering in the last month.

''The dorsum up in hazard reversals connotes that the market
sees slightly less risk,'' said , senior currency
strategist at red blood cell Capital Markets in Sydney. ''Risk sentiment
has improved over the past week, based mainly -- not on good
news -- but not-so-bad credit news.''

Australian authorities chemical bonds drop for a 6th day. The yield
on the benchmark 10-year enslaved rose 1 footing point, or 0.01
percentage point, to 6.31 percent. The terms of the 5 1/4
percent chemical bond maturing in March 2019 drop 0.083, or 83 cents per
A$1,000 human face amount, to 91.776. Chemical Bond outputs move inversely to
prices.

To reach the newsman on this story:
in Sydney at
.