Australia Dollar Rises as Investors Spooked by Hedge Fund Losses in U.S.

(Bloomberg) -- The Australian dollar rose to the
highest in 18 years on speculation losses at a hedge fund run by
Bear Stearns Cos. will bolster demand for financial assets
outside of the U.S.

The Australian dollar advanced to 87.61 U.S. cents, the
highest since February 1989, before trading at 87.55 U.S. cents
at 10:43 a.m. in Sydney from 87.37 cents late in Asia yesterday.


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Australian Dollar Trades Near Highest in 18 Years as Yields Lure Investors

(Bloomberg) -- The Australian dollar traded near
the strongest in 18 years against the U.S. currency and a 16-
year-high versus the yen on the attraction of the nation's
higher yields.

The local dollar is the third-best performer of the 16
most-active currencies in the past 12 months as investors have
taken advantage of Australia's yield advantage over Japan by
buying local assets with borrowed yen, as part of the so-called
carry trade. Australia's 6.25 percent interest rate compares
with 5.25 percent in the U.S. and Japan's 0.5 percent benchmark.


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Australia Dollar Drops Most in 4 Months Versus Yen as Carry Trades Unwound

(Bloomberg) -- The Australian dollar dropped the
most in four months against the yen as a fall in U.S. stocks
prompted investors to pare positions funded by loans in Japan.

The local dollar declined for the second day after the
Standard & Poor's 500 Index fell the most in a month on concern
subprime mortgage losses will worsen a housing slowdown. Japan's
0.5 percent overnight lending rate has prompted investors to
borrow yen to take advantage of Australia's 6.25 percent interest
rate. The so-called carry trade has helped the currency gain 11
percent versus the yen this year.


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Asian Stocks Fall From a Record, Led by Toyota and CSL, on Dollar Weakness

(Bloomberg) -- Asian stocks declined, dragging a
regional benchmark from a record, on speculation exporters'
overseas earnings will be eroded as the yen strengthened and the
Australian dollar traded near an 18-year high.

Toyota Motor Corp., the world's largest automaker by market
value, and CSL Ltd., the No. 2 maker of blood products which made
almost half of its 2006 sales in the Americas, led the drop.


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Australian Dollar Strengthens to 18-Year High on Wider Bond Yield Spread

(Bloomberg) -- The Australian dollar gained to an 18-
year high as the yield spread between the nation's two-year bonds
and Treasuries stayed near the widest in two months.

The currency climbed for a fourth day before a government
report that's expected by economists to show retail sales
accelerated in May, which may add to speculation the Reserve Bank
of Australia will raise interest rates this year. Investors sold
the U.S. dollar on concern rising mortgage defaults will weaken
the housing market and spill into the broader economy.


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Australian Dollar Near 18-Year High as Wider Bond Spread Lures Investors

(Bloomberg) -- The Australian dollar traded near an
18-year high as investors were attracted to the yield advantage
of the country's bonds over U.S. debt.

The yield spread between Australian two-year bonds and
equivalent Treasuries widened to 1.51 percentage points, the
most in two weeks. The currency is the second best performer
this month after New Zealand's dollar on Australia's 6.25
percent interest rate, which compares to 5.25 percent in the U.S.


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Australia Dollar Set For a Weekly Gain Against Japan's Yen on Carry Trade

(Bloomberg) -- The Australian dollar rose to its
highest in almost 16 years against the yen and is headed for a
weekly gain as investors are lured to the nation's higher
yielding assets.

So-called carry trades have lifted Australia's currency,
known as the Aussie, 23 percent against the yen the past year,
with investors attracted to a benchmark rate 5.75 percentage
points higher than Japan's, the lowest of major economies. The
Bank of Japan left borrowing costs unchanged last week and said
in its May minutes any increases would be ``gradual,'' spurring
bets the key rate won't be boosted this year.


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Australian Dollar Gains Most in 11 Months as Global Stock Markets Rebound

(Bloomberg) -- The Australian dollar had the biggest
gain in 11 months as record U.S. stocks gave investors confidence
to buy higher-yielding assets.

The currency traded at a 15-year high against the yen,
headed for a third monthly advance, as investors borrowed at
Japan's low interest rates to buy Australian assets in so-called
carry trades. Rising equities in Asia and Europe may encourage
investors to take on more risk after yesterday's slump in China.


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