John from Moneycorp

Australian dollar update 17/04/2012

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    The Australian dollar was the week's second best performer, strengthening by a cent against the pound. All of that gain came on Thursday morning, following strong employment data.

     

    It was not an especially fruitful week for Australian ecostats. Westpac's index of consumer confidence fell by -1.6% in April from 96.1 to 94.5 after an even bigger -5.0% fall in March. There were also back-to-back monthly falls for home loans; -2.5% in February after -1.1%. Inflation expectations among the public were higher in April at 3.3%, dimming hopes for lower interest rates (the Reserve Bank of Australia pays particular attention to expectations in its policy deliberations).

     

    The corn-curer, however, was the employment report. Instead of rising as expected to 5.3%, unemployment was steady at 5.2%. The even better news was that employers hired a further 44.0k staff in March. The figure more than offset the previous month's -15.4k decline and blew away expectations of a 6k increase.

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    Over the past 48 hours, the Australian dollar has weakened.

     

    This is due to increased concerns in the eurozone, particualrly in Italy and Spain (their economies are coming under more strain). Also, a private sector survey in Australia showed domestic business confidence fell in the first three months of 2012.

     

    Yesterday, there was some good news for the UK - unemployment registered its first fall since last spring according to the Office for National Statistics (ONS).

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    Guest smit
    The Australian dollar was the week's second best performer, strengthening by a cent against the pound. All of that gain came on Thursday morning, following strong employment data.

     

    It was not an especially fruitful week for Australian ecostats. Westpac's index of consumer confidence fell by -1.6% in April from 96.1 to 94.5 after an even bigger -5.0% fall in March. There were also back-to-back monthly falls for home loans; -2.5% in February after -1.1%. Inflation expectations among the public were higher in April at 3.3%, dimming hopes for lower interest rates (the Reserve Bank of Australia pays particular attention to expectations in its policy deliberations).

     

    The corn-curer, however, was the employment report. Instead of rising as expected to 5.3%, unemployment was steady at 5.2%. The even better news was that employers hired a further 44.0k staff in March. The figure more than offset the previous month's -15.4k decline and blew away expectations of a 6k increase.

    Figures do not tell the whole story............seen this in Uk at least twice. If unemployment figures are reasonably good, why is retail suffering???.. Answer..the building industry is stuffed. Self employed tradies dont show up on employnent figures, most try and grab a bit of w ork here and there. What do they do .........dont spend!!!...In normal circumstances building industry stuffed means economy stuffed. Govt dont see cos mining income. There is gunna be nothing else but a gradual slide in the economy unless someone wakes up in govt and realizes whats happening in street

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    The Australian dollar is continuing to remain weak.

     

    This is due to weak US economic data released and news of a possible French credit rating downgrade – both these factors are negative for the Aussie and prompts risk aversion therefore investors don’t typically invest in the dollar.

     

    Also, Australia’s export prices declined in the first three months of the year – this is a negative for the Aussie as it affects their all-important mining sector.

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    The Australian dollar is lower after statistics released showed weak inflation data, and as a result of this, there is further speculation an interest rate cut may take place next month.

     

    Consumer Price Index (CPI) data for Australia is being released on Tuesday and depending on what the data shows this could affect the exchange rate.

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    Guest Guest5035

    might be a cut, but bet the banks dont pass it all on.

     

    stevo

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