Dollar weaker as Wall St helps greenback

Source: AFP

THE Australian dollar has opened below 99 cents as another rally on Wall Street boosted the greenback.

At 7am AEST, the local currency was trading at 98.92 US cents, down from yesterday's close of 99.80 US cents, marking the weakest start to a session in 11 months.

HiFX senior dealer Dan Bell said a jump in the Dow Jones Industrial Average, to a record 15,215.25, buoyed the greenback, even though stronger risk sentiment has traditionally been a boon for the Australian dollar.

"The correlation between the US stock market and the Australian dollar has been breaking down over the last few months," he said.

"Investors are treating positive news in the US as ultimately positive for the US economy, which is actually supporting the US dollar and pushing up US bond yields."

US shares rose after Appaloosa Management hedge fund group boss David Tepper told CNBC the market could still soar higher.

With the greenback gaining strength, Mr Bell said, the Australian dollar was likely to hit 95 US cents in coming months, before falling to 85 US cents from next year.

"In the big scheme of things, the Australian dollar is still overvalued."

Traders did not appear phased by Treasurer Wayne Swan's Budget for 2013/14, which delivered a deficit of $18 billion for 2013/14, with a surplus forecast for 2016/17.

"That was pretty much as expected. I don't think it's given anyone too much of a surprise."

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Dollar weaker as Wall St helps greenback

Domestic economics under the microscope as the US maintains record highs. Commsec report

Source: AFP

THE Australian dollar has opened below 99 cents as another rally on Wall Street boosted the greenback.

At 7am AEST, the local currency was trading at 98.92 US cents, down from yesterday's close of 99.80 US cents, marking the weakest start to a session in 11 months.

HiFX senior dealer Dan Bell said a jump in the Dow Jones Industrial Average, to a record 15,215.25, buoyed the greenback, even though stronger risk sentiment has traditionally been a boon for the Australian dollar.

"The correlation between the US stock market and the Australian dollar has been breaking down over the last few months," he said.

"Investors are treating positive news in the US as ultimately positive for the US economy, which is actually supporting the US dollar and pushing up US bond yields."

US shares rose after Appaloosa Management hedge fund group boss David Tepper told CNBC the market could still soar higher.

With the greenback gaining strength, Mr Bell said, the Australian dollar was likely to hit 95 US cents in coming months, before falling to 85 US cents from next year.

"In the big scheme of things, the Australian dollar is still overvalued."

Traders did not appear phased by Treasurer Wayne Swan's Budget for 2013/14, which delivered a deficit of $18 billion for 2013/14, with a surplus forecast for 2016/17.

"That was pretty much as expected. I don't think it's given anyone too much of a surprise."

View the original article here

Chinese data helps $A to six-week high

Australian Money Source: Supplied

THE Australian dollar has risen to a six-week high following the release of strong economic data from China.

At 0700 AEDT on Friday, the local unit was trading at 104.37 US cents, up from 103.73 cents on Thursday.

Early on Friday morning, the currency peaked at 104.59 US cents, its highest level since February 5.

Westpac New Zealand senior market strategist Imre Speizer said the Australian and New Zealand dollars had a good night despite falls in sharemarket.

"Basically, I put it down to Downunder and Asian data boosting the two currencies," Mr Speizer said from Auckland.

"NZ gross domestic product boosted the kiwi and helped the Aussie marginally."

Data from HSBC on Thursday showed manufacturing activity in China improved in March, following weak figures posted for February.

Official figures from New Zealand showed its economy grew at an annual pace of 2.5 per cent, the fastest growth since the global financial crisis.

Sharemarkets and the euro lost ground during the offshore session after the European Central Bank (ECB) gave Cyprus an ultimatum.

The ECB said Cyprus had until Monday to clinch a bailout deal for its struggling banks or emergency funding would be cut off.

"You might also say the unfolding turmoil in Cyprus could be taking some of the shine off the euro zone as a place to park your reserves," Mr Speizer said.

"Central banks and others may be looking at increasing their allocations of Australian and New Zealand dollars."

Mr Speizer said he expected news out of Europe, especially about Cyprus, would be the main driver for currency markets on Friday and into the weekend.

View the original article here

Chinese data helps $A to six-week high

Australian Money Source: Supplied

THE Australian dollar has risen to a six-week high following the release of strong economic data from China.

At 0700 AEDT on Friday, the local unit was trading at 104.37 US cents, up from 103.73 cents on Thursday.

Early on Friday morning, the currency peaked at 104.59 US cents, its highest level since February 5.

Westpac New Zealand senior market strategist Imre Speizer said the Australian and New Zealand dollars had a good night despite falls in sharemarket.

"Basically, I put it down to Downunder and Asian data boosting the two currencies," Mr Speizer said from Auckland.

"NZ gross domestic product boosted the kiwi and helped the Aussie marginally."

Data from HSBC on Thursday showed manufacturing activity in China improved in March, following weak figures posted for February.

Official figures from New Zealand showed its economy grew at an annual pace of 2.5 per cent, the fastest growth since the global financial crisis.

Sharemarkets and the euro lost ground during the offshore session after the European Central Bank (ECB) gave Cyprus an ultimatum.

The ECB said Cyprus had until Monday to clinch a bailout deal for its struggling banks or emergency funding would be cut off.

"You might also say the unfolding turmoil in Cyprus could be taking some of the shine off the euro zone as a place to park your reserves," Mr Speizer said.

"Central banks and others may be looking at increasing their allocations of Australian and New Zealand dollars."

Mr Speizer said he expected news out of Europe, especially about Cyprus, would be the main driver for currency markets on Friday and into the weekend.

View the original article here