WSJ:Australian Dollar Up Slightly But Europe Remains In Focus
Rates At 0545 GMT
Latest Change
AUD/USD 1.0110 +0.21%
AUD/JPY 77.89 +0.11%
6.5% May, 2013 3.3927% -0.0140
4.5% Mar, 2020 3.9920% +0.0621
10-Yr Spread To U.S. +208 bps +4 bps
SFE Dec 3-Year Futures 96.68 unch
SFE Dec 10-Year Futures 95.905 -0.065
SYDNEY (Dow Jones)-- The Australian dollar was locked in a narrow range Thursday in Asia trading, awaiting more direction and developments on the euro zone debt issues.
The Aussie was volatile overnight, initially rallying during U.S. trading and then sinking as Fitch warned about the credit quality of six large U.S. banks.
But in Asia trading, the Australian dollar calmed down as little news out of Europe settled trading. After reaching a low of US$1.0017 in the early afternoon in Sydney, the Australian dollar gained steadily for much of the late afternoon.
Even as the pair bounced, however, Richard Grace, chief currency strategist at Commonwealth Bank of Australia, said the Australian dollar risked falling to another low in the coming days, even below parity with the U.S. dollar.
"There is no major conviction either way right now. I really wouldn't be surprised to see us drift below parity soon as I suspect the (U.S. dollar) will remain well bid," said Grace.
At 0545 GMT, the Australian dollar was trading at US$1.0110, up slightly from US$1.0089 late Wednesday. Against the yen, the currency changed hands at Y77.89, up from Y77.70.
On the domestic front, there was one piece of economic data with an estimate for growth in the volume of imported goods in the third quarter revised up to 5.7% from 3.9%.
UBS Economist Scott Haslem said the data increased the chance that third-quarter gross domestic product might be weaker then some economists expect, adding the data also "raises the chance the (Reserve Bank of Australia) will have to downgrade its near-term GDP forecasts again at its next (Statement on Monetary Policy) in February."
Even so, the data did little to impact bond prices with bonds falling sharply at the long end of the curve Thursday, in part due to the paring back of a big surge over the past few days in a quieter session.
-By Geoffrey Rogow, Dow Jones Newswires; +61-2-8272-4686; geoffrey.rogow@dowjones.com
