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Aussie at One-Week Highs

March 9, 2007 on 10:57 pm | In Australian Dollar | Add Your Comment

The Aussie touched one week highs on today’s Asian forex trade. The rally was a little stifled as a result of caution in the markets ahead of US employment data coming up overnight. This morning the Aussie was around 77.90 cents compared to 77.73 cents yesterday. Sue Trinh, currency strategist at RBC Capital, have noted that carry trades have gained renewed interest with investors encouraged by signs of consolidation in world share markets. Is the dollar set for recovery above 78 cents when just a week ago we were thinking about 80 cents? Hmm – something to ponder in the weekend.

Australian Dollar Stronger for Now

March 7, 2007 on 11:56 pm | In Australian Dollar | Add Your Comment

The Australian dollar closed the Asian forex trading day stronger today brought about by gains in local and regional stockmarkets as well as economic data released today. The Australian economy grew by 1.0 percent in the fourth quarter, lifting on year growth to 2.8 percent from 2.2 percent in the third quarter. Strong spending, construction and mining activity gave the economy a boost. Growth was expected by the market to be 0.6 percent. Assistant Reserve Bank of Australia (RBA) Governor Malcolm Edey told a business conference that the world economic outlook was strong with Europe and Asia ready to pick up the slack should the U.S. economy slow. Edey said the long-term prospects for growth in Asia were rich with both China and India set for decades of stellar expansion.

Australian Dollar Steady!

March 6, 2007 on 10:56 pm | In Australian Dollar | Add Your Comment

The Aussie dollar is steady for now. Australia’s monthly trade deficit in January has narrowed which encouraged the local currency somewhat. The deficit narrowed to A$876 million in January from a gap of A$1.379 billion in December. The Australian Bureau of Statistics (ABS) said that exports rose by 2 percent and imports fell by 1 percent in the month. The Reserve Bank of Australia (RBA) met earlier this morning but the market expects them to hold rates steady at 6.25 percent. The outcome of their meeting will be found out tomorrow. Watch out for fourth quarter economic growth data due 0030 GMT (11.30am Sydney time) also tomorrow which could influence forex markets.

It’s Those Carry Trades Again

March 5, 2007 on 9:53 pm | In Australian Dollar | Add Your Comment

Today was a nasty day for the Australian dollar. Those carry trades have forced investors to continue to sell down and unwind their carry trade exposures in their forex holdings due to the continued bearish market sentiment. It was interesting to note that government bonds continued to rally as nervousness across the region encouraged safe-haven buying. This morning the Australian dollar bought around 77.74 cents down from the 78.53 cents we saw last Friday. So, it was a correction of the markets? Don’t you just love it when the financial journos and the other market commentary people always pin it down to the correction the market needed? Anyway, the Australian dollar was clearly still being affected by the risk aversion procedures taken by the players in the market that started last week and it seems that it is affecting markets globally. Even Australian local economic reports didn’t even have any influence the markets at all: Aussie company profits rose 2.5 percent in the fourth quarter and inventories rose by 0.1 percent breaking the two quarter decline. On Wednesday the Australian Bureau of Statistics (ABS) will issue their fourth quarter national accounts data Wednesday at 0030 GMT or 1130 local Sydney time.

Australian Dollar Selling Pressure Easing

March 3, 2007 on 9:50 pm | In Australian Dollar | Add Your Comment

While the Australian dollar has drifted lower in forex trade today, selling pressures across worldwide markets have eased. Government bond prices have closed higher after the economic data out of US of a downgrade in US fourth quarter GDP (Gross Domestic Product). In local data there was an upbeat fourth quarter capital investment data where business investment lifted just 1.0 percent (seasonally-adjusted) in the fourth quarter from the third, the data included news of a sharp upward revision of expected mining sector investment through 2007-08. Miners expect investment will rise by 71% in 2007-08 over the previous year. You’ve got to remember there is still the uncertainty linked with the sharemarket which means that the Australian dollar will remain vulnerable. Watch out for Australian Retail Sales Data tomorrow.

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