FOREXYARD: Forex News Blog

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• AUD Falls despite another Interest Rate Hike
• Australian Inflation Grows, AUD rises versus Counterparts
• AUD/USD Reaches New Highs as Australian Employment Improves
• AUD Breaks 4 day Loss, Rises on RBA Governor’s Remarks
• AUD Declines as Dollar Strengthens and Commodities Drop
• AUD Rallies on Renewed Risk Appetite
• AUD Rises on Market Optimism, Growth in Oil Prices
• AUD Maintains Strength Ahead of U.S Non Farm Payroll Data
• Australian Economy Grows at a Faster than Expected Rate in the 4th Quarter
• Australian Economy Continues to Recover, Expectation of Interest Rates Hike Mount
• Greece Woes Continue to Weigh on AUD

AUD Falls despite another Interest Rate Hike Posted: 04 May 2010 02:30 AM PDT Australia's central bank increased the benchmark interest rate for the 6th time to 4.5% from 4.25%. The accompanying statement sent slightly mixed signals, flagging inflation concerns but also hinting to a pause in the monetary policy tightening stating that borrowing costs have returned to "average" pre global recession levels, ending the monetary stimulus. The AUD dropped sharply as a result of the statement as it dampened investors' expectations the current pace of monetary tightening will continue and that the central bank may keep rates on hold for the next few months. The AUD fell to a low of 91.86 U.S cents following the release.  This is may be a good opportunity to turn to the New Zealand Dollar which is normally shadowed by the AUD. While the Australian central bank hinted at a pause in interest rate hikes, the New Zealand central bank stated last week it expects to begin raising rates "in coming months. Furthermore, economic fundamentals are coming better than expected recently, supporting the assumptions the central bank will start tightening monetary policy soon. Whereas the AUD's rally may be stalled in the near future, the NZD may yet be undervalued and provide interesting investment opportunities.

Australian Inflation Grows, AUD rises versus Counterparts Posted: 28 Apr 2010 10:15 AM PDT Australia's inflation rate increased to 0.9% in the first quarter, on par with expectations and almost doubling from the previous quarter's 0.5%. The result boosted investors' expectation that central bank governor Glenn Stevens will continue the round interest-rate increases during its upcoming meeting on May 4th. The Australian Dollar rose to a high of 92.48 U.S cents today, from 91.55 yesterday, when it touched 91.36 cents, the lowest level since March 31. The AUD was pressured lately along with other higher yielding currencies as investors' risk appetite dampened due to the continuous turmoil over the Greek debt crisis. The AUD has been one of the top performers in the first half of April, following the latest interest rate increase and a slew of positive economic data. The long term expectation for the AUD is to continue recovering and reaching back towards the 94.00 cents level versus the AUD, particularly if interest rates will indeed rise again next week.

AUD/USD Reaches New Highs as Australian Employment Improves Posted: 08 Apr 2010 06:41 AM PDT Australian employers added 19.6K jobs in March, with the unemployment level remaining at 5.3%, almost half the unemployment rate in the U.S and E.U. Tuesday, Reserve Bank of Australia Governor Stevens raised interest rates to 4.25%, the 5th time out the 6 last meetings. The continuous improvement in employment level supports the central bank's decision to continue tightening monetary policy and raising interest rates, with economists expecting the rate to be raised to 5% by the end of this year. The Australian Dollar rose to a high of 82.81 U.S cents following the release. The AUD, however, declined from its highs today as Greek default concerns and declining equities weigh on higher yielding riskier currencies. Despite the decline, the south pacific currency is still trading steadily above the 92.00 cents level and with the continues improvement in economic conditions and expectations of further interest rate increases it is likely the currency will continue to appreciate versus its major rivals, particularly in light of the record low rates in the U.S, E.U, Japan and U.K, and with no sign of an approaching increase.

AUD Breaks 4 day Loss, Rises on RBA Governor’s Remarks Posted: 29 Mar 2010 02:00 AM PDT The Australian Dollar ended its recent downward trend in today's Asian and European trading, ahead of Wednesday's Retail Sales report which is expected to shows February sales rose. The AUD was further boosted be comments made by Reserve Bank of Australia Governor Glenn Stevens hinting at further interest rate hikes. The bank has raised rates at four of its past five meetings. Benchmark interest rates are 4%in Australia and 2.5% in New Zealand, compared with 0.1% in Japan and as low as zero in the U.S. Higher yields attract investors to the south pacific currency, along with strong economic fundamentals that support tighter monetary policy and higher interest rates. Australia's currency rose to 91.45 U.S. cents from 90.41 cents last week in New York. It also climbed to 84.54 yen. While the U.S, U.K and Euro-Zone nations continue to exhibit mixed economic data, raising doubts as to the strength and stability of their economic recovery, Australia continues to perform consistently in par or above expectations thus providing strong ground to continued monetary tightening. The New Zealand Dollar also gained in today's trading, boosted by equity gains in Asia and Europe and ahead of a report that is expected to show that home building permits rose in February. New Zealand's Dollar gained to 71.00 U.S. cents from last week and advanced to 65.53 Yen from 65.11 Yen.

AUD Declines as Dollar Strengthens and Commodities Drop Posted: 24 Mar 2010 07:17 AM PDT The Australian and New Zealand Dollars have been suffering this week along with other higher yielding currencies from the negative economic sentiment and the strong Dollar. Continued concerns over the Greek debt crisis, as well as today's downgrade of Portugal, dampened demand for riskier currencies and pushed investors to the USD as a refuge. The decline in Gold and Oil prices throughout the week also contributed to the decline as these are Australia's 3rd and 4th most valuable commodity exports. With no major news events from the region this week, the South Pacific currency continues to follow the trend of other growth linked currencies and decline versus the Dollar. The AUD is currently trading at 91.16 U.S cents after briefly dropping to below 90.00 cents.

AUD Rallies on Renewed Risk Appetite Posted: 17 Mar 2010 12:44 PM PDT The Australian Dollar rallied today as world equities and commodities rose on renewed risk appetite. The jump came after Federal Reserve's decision Wednesday to keep interest rates at an all time low and after a drop in one reading of U.S. inflation boosted investors' expectations that the Federal Reserve will keep interest rates low for some time. The Bank of Japan's doubling of the size of its bank-loan program to keep borrowing costs low as a mean of struggling with deflation also boosted the South Pacific currency. Benchmark rates are 4% in Australia compared with 0.1% in Japan and as low as zero in the U.S. The AUD traded at a 2 month high versus the USD as the price of gold, the nation's 3rd most valuable commodity export, advanced and the price of Crude Oil rose above 83$ a barrel. Australia's currency is at 92.23 U.S. cents from 91.85 cents yesterday. It earlier rose to 92.51 cents. The currency also gained 0.3 percent to 83.65 Yen.

AUD Rises on Market Optimism, Growth in Oil Prices Posted: 08 Mar 2010 03:43 AM PST The Australian Dollar rose to it strongest level since January as concerns eased over Greek budget debt and commodity prices rose. Demand for the AUD and other higher yielding currencies increased after French President Nicolas Sarkozy signaled support for Greece. Further boosting the AUD, Oil prices have been trading steadily around the $82 a barrel, providing support for commodity linked currencies such as the AUD.  Australia's Dollar is also staying strong ahead of the Employment data, to be released this Thursday. The report is expected to show that the nation's employers added jobs for a sixth month in February adding to speculations the central bank will need to raise interest rates further. As Australia's economy continues to improve investors' expectations of ever higher interest rates in Australia grow and a continuous improvement in employment will solidify this expectation. Australia's currency is currently traded at 91.15 U.S. cents from 90.77 cents in New York on March 5th. It earlier touched 91.30 cents. The currency advanced 0.6% to 82.42 yen.

AUD Maintains Strength Ahead of U.S Non Farm Payroll Data Posted: 05 Mar 2010 01:22 AM PST While staying lower for most of today's Asian trading as investors awaited key US employment data, the AUD has recovered earlier losses and is currently back to trading above 90 U.S cents. With no other major news most investors remained hesitant in anticipation of US Non Farm Payrolls data due to be released later today at 13:30 GMT. The US Department of Labor is due to release the non-farm payrolls report for February with economists forecasting the US unemployment rate to have risen to 9.8% from 9.7% and that employers cut a net total of 50,000 jobs. The AUD has been one of the top performers this year, bolstered by a strengthening local economy, continuous interest rate hikes by the Reserve Bank of Australia as well as growth in commodities' prices, Australia's main exports. With interest rate at all time lows in the U.S, Japan and Euro-Zone, Australia's significantly higher rates help support the currency, especially as it seems unlikely other countries will start raising rates in the short term. The Aussie climbed to a 3-day high of 80.65 against the Japanese Yen .The Australian Dollar rose to 90.22 U.S cents from 90.03 late New York Thursday.

Australian Economy Grows at a Faster than Expected Rate in the 4th Quarter Posted: 03 Mar 2010 01:38 PM PST Australia's economy grew at a faster than expected rate last quarter, climbing 0.9% from the 3rd quarter. The better than expected result help solidify the notion that the Australian economic recovery is sustainable, underscoring the central bank's decision yesterday to boost interest rates for the 4th time to 4.00%. The GDP figures lend support to the central bank's decision to raise interest rate as evidence mount that the monetary stimulus is no longer required, boosting expectations that a continuation of tightening of the monetary policy is expected. Faster than anticipated growth was key reason policy makers increased the overnight cash rate target to 4 % yesterday while signaling for a possibility of further future hikes. The Australian Dollar traded near its strongest level in a decade against the New Zealand Dollar as Australian economic growth proves to be much stronger than that of New Zealand. Australia's currency traded at NZ$1.3037 from NZ$1.2980 yesterday. The Aussie rose to 90.58 U.S. cents after touching 90.84 cents, the highest since Feb. 23. The currency was little changed at 80.05 Yen.

Australian Economy Continues to Recover, Expectation of Interest Rates Hike Mount Posted: 26 Feb 2010 05:45 AM PST The Australian Dollar rebounded slightly in today's early trading after better than expected results for Private Sector Credit were published. This is a measure of the change in the total value of new credit issued to consumers and businesses. The result indicates that public and business spending grows as the Australian economy continues to recover from the global recession. The latest result adds to the expectations that the central bank will resume raising interest rates in its upcoming March 2nd meeting as the economic data coming out of Australia recently justifies higher rates. This expectation helps push the AUD up against the USD and JPY. The benchmark interest rate is 3.75% in Australia compared with as low as zero in the U.S. and 0.1% in Japan; this makes the South Pacific nation's assets attractive to investors, bolstering the currency. The Aussie received further boost by a rebound in Asian equities today as Japan's factory output expanded for an 11th straight month in January and Retail Sales in the world's second-largest economy jumped 2.6% from a year earlier. Australia's currency rose to 89.18 U.S. cents and advanced to 79.49 yen.

Greece Woes Continue to Weigh on AUD Posted: 25 Feb 2010 03:37 AM PST Australian business investment advanced 5.5% from the previous quarter, beating investors' expectations of a 1.5% increase. The growth is another sign the economy continues to strengthen, intensifying investors' expectations that the central bank will raise interest rates next week for the fourth time, to 4.0%. The spur in investment is fueled by rising Chinese demand for Australia's iron ore, coal and gas, which in turn is fueling economic growth in the South Pacific nation. However, despite the positive economic data coming from Australia, persistent uncertainty regarding Greece's economic instability continues to weigh on higher yielding currencies, including the AUD.  The Australian Dollar pared this month's advance versus the USD after Standard & Poor's said yesterday it may downgrade Greece's credit rating by the end of March. A decline in Asian stocks and commodities also weight on the AUD in earlier trading. Australia's currency is currently trading at 89.01 U.S. cents from 89.37 cents yesterday in New York. It fell to 79.53 Yen from 80.56 Yen.

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