Dollar opens below parity

Wall Street is falling back from record highs overnight as retail markets pose a slight gain. Commsec report

Australian Money Source: Supplied

THE Australian dollar has remained below parity with the greenback as healthy American retail data underpinned strength in the US currency.

At 12pm AEST today, the Australian dollar was trading at 99.77 cents, down almost a quarter of a US cent from yesterday's close of 100 US cents.

The local unit fell last night, and continued to struggle this morning, after US Commerce Department data showed a retail sales jump of 0.1 per cent during April. While the rise was unspectacular, it was more upbeat than market forecasts of a 0.3 per cent drop, boosting the US dollar against most major currencies.

"At the moment, the market's quite sensitive to any sort of positive US news," OzForex chief currency strategist Jim Vrondas said. "We've seen them get long buying US dollars."

Still, Mr Vrondas said, the Australian dollar could briefly rise above parity with the US currency, to 101 US cents tonight, if Treasurer Wayne Swan's sixth budget is less draconian than financial markets expect.

"The expectations are it's going to be relatively tough, but maybe not as tough," he said, adding that traders would "sell on a rally" if the Australian dollar rose above 100 US cents.

The market has overlooked lending finance data for March, showing a 5.8 per cent rise in owner-occupier home loans.

Meanwhile, the Australian bond market was firmer at noon. At 12pm AEST today, the June 10-year bond futures contract was trading at 96.775 (implying a yield of 3.225 per cent), up from 96.750 (3.250 per cent) yesterday. The June three-year bond futures contract was at 97.440 (2.560 per cent), up from 97.410 (2.590 per cent) previously.

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Dollar below parity with US greenback

Wall Street is falling back from record highs overnight as retail markets pose a slight gain. Commsec report

Australian Money Source: Supplied

THE Australian dollar has remained below parity with the greenback as healthy American retail data underpinned strength in the US currency.

At 12pm AEST today, the Australian dollar was trading at 99.77 cents, down almost a quarter of a US cent from yesterday's close of 100 US cents.

The local unit fell last night, and continued to struggle this morning, after US Commerce Department data showed a retail sales jump of 0.1 per cent during April. While the rise was unspectacular, it was more upbeat than market forecasts of a 0.3 per cent drop, boosting the US dollar against most major currencies.

"At the moment, the market's quite sensitive to any sort of positive US news," OzForex chief currency strategist Jim Vrondas said. "We've seen them get long buying US dollars."

Still, Mr Vrondas said, the Australian dollar could briefly rise above parity with the US currency, to 101 US cents tonight, if Treasurer Wayne Swan's sixth budget is less draconian than financial markets expect.

"The expectations are it's going to be relatively tough, but maybe not as tough," he said, adding that traders would "sell on a rally" if the Australian dollar rose above 100 US cents.

The market has overlooked lending finance data for March, showing a 5.8 per cent rise in owner-occupier home loans.

Meanwhile, the Australian bond market was firmer at noon. At 12pm AEST today, the June 10-year bond futures contract was trading at 96.775 (implying a yield of 3.225 per cent), up from 96.750 (3.250 per cent) yesterday. The June three-year bond futures contract was at 97.440 (2.560 per cent), up from 97.410 (2.590 per cent) previously.

View the original article here

Dollar below parity with US greenback

Wall Street is falling back from record highs overnight as retail markets pose a slight gain. Commsec report

Australian Money Source: Supplied

THE Australian dollar is holding below parity with the US greenback following better-than-expected American retail sales data.

At 7am AEST today, the local currency was at 99.53 US cents, almost half a US cent below yesterday's close of 100 US cents.

Today, the local currency started the trading session below parity with the US unit for the first time in 11 months, as a 0.1 per cent rise in American retail sales for April buoyed the greenback.

Bank of New Zealand currency strategist Mike Jones said the unexpected result, which beat forecasts of a 0.3 per cent drop, dealt a blow to the Australian dollar.

"The Aussie stands out as the weakest link on currency markets overnight," he said. "Generally speaking, it's been relatively quiet but Aussie dollar weakness has been eye-catching."

"It's more a US story than an Aussie-specific story."

The fall also follows a 9.3 per cent rise in Chinese industrial output for April, which was below the 9.5 per cent level expected by economists.

Mr Jones said the Australian dollar was likely to stay below parity with the US greenback today, ahead of the federal budget.

"Today's session probably is going to be all about consolidation for the Aussie dollar."

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Dollar back below US103 cents

THE Australian dollar fell a quarter of a US cent after the release of weaker-than-expected building approvals figures.

At 11.30am AEST today, the Australian Bureau of Statistics announced approvals for the construction of new homes fell 5.5 per cent across Australia in March, a weaker result than the market was expecting.

By 11.35am AEST the currency was trading at 102.45 US cents, down from 102.69 US cents just before the data's release.

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Dollar back below US103 cents

THE Australian dollar has dropped back below 103 US cents for the first time in three days amid falls on US stock markets and weaker commodity prices.

At 7am AEST today, the currency was trading at 102.78 US cents, down from 103.54 US cents yesterday afternoon.

HiFX senior trader Stuart Ive said The Australian dollar lost more than three quarters of a US cent overnight amid negative sentiment surrounding weaker-than-expected economic figures out of the US and China.

Official Chinese figures, released on Wednesday, showed that the country's key manufacturing sector grew at a slower pace in April while manufacturing and employment data released in the US overnight also disappointed markets.

"That has all weighed on the Australian dollar," Mr Ive said.

The negative sentiment saw New York sharemarkets lose almost one per cent while gold and copper prices also fell.

Mr Ive said the release of another set of Chinese manufacturing figures, from banking giant HSBC, would be the main driver of the Australian dollar during today's local session.

But, he said, the currency could push back above 103 US cents again during morning trade.

"I think we could probably edge back towards 103.10, but I don't see us going much further than that."

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Dollar back below 103 US cents

THE Australian dollar has dropped back below 103 US cents following weakness on global share markets and commodity prices.

At 0700 AEST TOday, the currency was trading at 102.82 US cents, down from 103.10 US cents on Friday afternoon.

Westpac New Zealand senior market strategist Imre Speizer said the Australian dollar weakened during Friday night's European and US sessions as equities markets moved lower.

Mr Speizer said markets were disappointed after European Central Bank (ECB) official Joerg Asmussen warned of the side effects of low interest rates.

His comments undermined widespread expectations the ECB will cut its key interest rate when it meets later in the week.

Mr Speizer said the currency was likely to continue to move lower over the next few days, possibly dropping below 102.20 US cents.

"It looks like it wants to test those levels," he said.

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