WSJ:Australian Dollar Up Late, Helped By Greek Vote
Rates At 0500 GMT
Latest Change
AUD/USD 1.0740 +0.18%
AUD/JPY 83.30 +0.20%
6.25% Apr, 2015 3.5512% +0.0252
5.50% Apr, 2023 4.2365% +0.0332
10-Yr Spread To U.S. +211 bps +2 bps
SFE March 3-Year Futures 96.45 -0.03
SFE March 10-Year Futures 95.91 -0.03
SYDNEY (Dow Jones)--The Australian dollar gained slightly on Monday, boosted by Greece's parliament handily approving an austerity plan.
Early in the session, the Greek Parliament, heavily guarded by riot police, approved painful austerity measures and a bond swap, a key step in getting the EUR130 billion in bailout money to cover the government's financing needs through 2015. The development overshadowed Japan's fourth quarter gross domestic product shrinking more than analysts expected in the fourth contraction in five quarters.
Traders noted that for the Australian dollar, the gain was largely a correlation trade that followed on a similar increase in certain equities, such as the Shanghai Composite.
"While the Greek austerity vote undoubtedly helped to boost sentiment earlier in the session, it is clear that the recovery on the Shanghai Composite intraday has helped spur on gains elsewhere," said David Scutt, a treasury dealer with Arab Bank in Sydney.
At 0500 GMT, the Australian dollar was trading at US$1.0740, up from US$1.0721 late Friday. It touched an intraday low of US$1.0680 before bouncing in the afternoon. Against the Japanese yen, the Australian currency changed hands at Y83.30, up from Y83.13 late Friday.
While the currency gained, bonds fell slightly on both ends of the curve.
On the local front, the tone was also optimistic with approvals for housing finance increasing for the ninth consecutive month in December and beating market expectations. Given growing concern about the local property market after a series of steady declines in 2011, the data from the Australian Bureau of Statistics helped ease some fears.
"Good data," said Citigroup chief economist Paul Brennan, "but unlikely to matter much for monetary policy. Domestically, Thursday's labor force will be much more important."
After the Reserve Bank of Australia surprised traders last week by keeping interest rates on hold in February, economists note the Thursday jobs report will be the key economic figure before the RBA's March rate decision. In only two business days, three of Australia's four largest banks have independently raised their own lending rates, complaining of funding pressures.
-By Geoffrey Rogow, Dow Jones Newswires; +61-2-8272-4686; geoffrey.rogow@dowjones.com
