March 2007
Aussie at One-Week Highs
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
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.
Australian Dollar Steady!
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.
It’s Those Carry Trades Again
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?
Australian Dollar Selling Pressure Easing
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.