AUSD heads for 8-Week high

Wednesday 13th January 2010

Rising employment figures are expected to push the Australian dollar to an eight-week high against the U.S. currency, with job figures expected to increase for the fourth month in a row.

Australian employers added 10,000 jobs last month, according to a Bloomberg survey, with Australian government bonds set for the largest back-to-back gain since November.
 
Australia’s dollar rose 0.4 per cent to 92.37 U.S. cents at 4:28 p.m. in Sydney from 92 cents yesterday in New York, when it fell one per cent in the biggest slide since Dec. 17.

The Aussie advanced 0.5 per cent to 84.14 yen after dropping 2.2 per cent yesterday. On Jan. 11, the Aussie touched 93.26 U.S. cents, the highest level since Nov. 18., according to Bloomberg figures.

New Zealand’s dollar climbed to 74.13 U.S. cents from 73.85 cents yesterday, when it declined 0.4 percent. The kiwi advanced to 67.56 yen from 67.19 yen.

Demand for both currencies was limited after China raised banks’ reserve requirements by 50 basis points yesterday starting Jan. 18, from 15.5 per cent.

The decision indicated increasing government concern a continuation of the record 9.21 trillion yuan (USD 1.3 trillion) of loans in the first 11 months of 2009 will create a bubble in property and stock prices.

The Aussie may find buyers near 91.49 U.S. cents and 90.92 cents, wrote Matthew Strauss, a senior currency strategist in Toronto at Royal Bank of Canada, the nation’s biggest lender. It will struggle to rise past 93.25 cents, he wrote.

“The Australian dollar will likely continue to be at the mercy of global sentiment,” Strauss wrote. “The yen and to a lesser extent the U.S. dollar were back in favor as risk aversion returned.”

Australian government bonds rose for a second day. The yield on 10-year notes fell 10 basis points, or 0.10 percentage point, to 5.53 per cent, according to data compiled by Bloomberg. The securities are set for the biggest back-to-back gain since an 18-basis-point decline in yields over the two days ended Nov. 27.

Holders of Aussie bonds of all maturities incurred a loss of 2.7 per cent last year, according to Bank of America Merrill Lynch indexes, the worst performance since 1994.