WSJ:Australian Dollar Down Late As Greece Deal Fails To Spark Buying
Rates At 0545 GMT
Latest Change
AUD/USD 1.0654 -0.66%
AUD/JPY 85.34 -0.18%
6.25% Apr, 2015 3.6874% -0.002
5.50% Mar, 2023 4.2928% -0.001
10-Yr Spread To U.S. +213 bps -2 bps
SFE Mar 3-Year Futures 96.31 -0.01
SFE Mar 10-Year Futures 95.85 Unchanged
SYDNEY (Dow Jones)--The Australian dollar was lower Wednesday as markets meandered in Asia, still unsure of what to do after the announcement in Europe this week of a deal to secure Greece's future.
Traders said the Australian dollar looks fully valued against an array of currencies such as the U.S. dollar, the New Zealand dollar, the euro and the pound.
Questions also remain about the Greek bailout, including over Greece's own response ahead of its parliamentary election, expected within months.
"Traders were waiting for fresh buying and it never emerged," said David Scutt, senior trader at Arab Bank.
At its current levels, the Australian dollar is also beginning to look weak from a technical perspective, he added. Recent predictions that the Australian dollar would test fresh highs now look in doubt, Scutt said.
At 0545 GMT, the Australian dollar was trading at US$1.0654, down from US$1.0725 late Tuesday. Against the Japanese yen, the Australian currency changed hands at Y85.34, down from Y85.49 late Tuesday.
Sean Callow, senior currency strategist at Westpac, said the Australian dollar is looking "tired" after posting a gain of 4.2% on a trade-weighted basis since the start of the year.
All eyes were China's flash Manufacturing Purchasing Managers Index data earlier in the day, which showed production in Australia's largest trading partner was largely stable in February.
The February reading for the HSBC China Manufacturing PMI rose to a four-month high of 49.7, compared with 48.8 in January.
However, that improvement was "brought about by a post-Chinese New Year rebound in production," HSBC's China economist Sun Junwei said, adding that China's growth "remains on track for a slowdown."
Looking ahead, Reserve Bank of Australia Governor Glenn Stevens will report to parliament on Friday. Stevens is expected the shed more light on why the RBA kept interest rates steady in February.
-By James Glynn, Dow Jones Newswires; 61-2-8272-4685; james.glynn@dowjones.com
