FOREX - AUSTRALIAN DOLLAR ENDS STRONGER - NOV 5, 2007.

SYDNEY, Nov 5 Asia Pulse - The Australian dollar closed stronger today despite investor condidence taking another hit on further fallout from the global credit crunch.

At 1700 AEDT, the Australian dollar was trading at 92.06 US cents, up from Friday's close of 91.63.

During the local session, it traded between a low of 91.86 US cents and a high of 92.18.

RBC senior currency strategist Sue Trinh said renewed concerncs over conditions in credit markets led to a fresh bout of risk aversion, weighing on higher-yielding currencies such as the Australian dollar.

She said the latest bout of risk aversion was sparked by news Citigroup - the largest bank in the US - was likely to make up to $US11 billion ($A11.95 billion) in writedowns due to exposure to the sub-prime mortgage sector.

"It's seen equity markets, at least in Asia, come well off on the day ... and that's weighed on carry trades of which (the) Aussie has been a beneficiary.

"So, it's seen the Aussie come off against the US dollar and against the Japanese yen on the day."

However, Ms Trinh said the Australian dollar managed to close above 92 US cents, boosted by expectations the Reserve Bank of Australia (RBA) would announce a rise in interest rates on Wednesday.

The RBA is widely expected to raise the official cash rate by 25-basis points to 6.75 per cent.

A rate rise would be supportive of the Australian dollar as it would widen the interest rate differential between the US and Australia.

Higher interest rates, used to combat inflation, can strengthen a currency by giving investors higher returns on investments denominated in it.

On the data front, the ANZ job ads series today showed the total number of jobs advertised in major metropolitan newspapers and on the internet rose by a seasonally adjusted 2.7 per cent in October to an average of 254,554 a week.

It was the highest number of job ads recorded in any month since the survey began.

Meanwhile, the TD Securities-Melbourne Institute monthly inflation gauge showed inflation remained at elevated levels in October.

The inflation gauge rose by 0.3 per cent in October following a 0.2 per cent rise in September and a 0.5 per cent rise in August.

In the 12 months to October, the inflation gauge rose by 3.3 per cent, the highest annual increase since March.

Annual underlying inflation was 3.2 per cent in the 12 months to October - above the RBA's target band of between two and three per cent.

And the Australian Industry Group-Commonwealth Bank Performance of Services Index (Australian PSI) fell by 3.2 points to 53.2 in October, remaining above the 50.0 level that separates expansion from contraction.

The currency closed at 105.62 yen, up from Friday's close of 104.98 yen, and at 63.55 euro cents, up from 63.47 euro cents.

In other currencies, the euro was at 1.4487 US dollars, up from Friday's close of 1.4436, and at 166.18 yen, up from 165.49 yen.

The US dollar closed the local session at 114.72 yen, up from 114.59.

(AAP) 05-11 1809