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$A lower on US economic strength

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Published on: Wednesday, August 14, 2013

AAP

The Australian dollar is lower as the greenback is boosted by the improving US economic outlook, after the release of positive retail sales data.

At 1200 AEST on Wednesday, the local unit was trading at 90.98 US cents, down from 91.38 cents on Tuesday.

The US dollar was higher against all major currencies after core retail sales, which exclude the volatile car, gas and building supply categories, rose 0.5 per cent in July, following a rise of 0.1 per cent in May and 0.2 per cent in June.

LTG GoldRock director Andrew Barnett said the Australian dollar's climb higher last week was temporary, with the local currency set to move lower in the long term.

"The continued increasing economic trend in the US and the potential for them to taper the stimulus program is impacting the US dollar to the upside," Mr Barnett said.

"But the weak economic data in Australia, the widening deficit and all the numbers that we've been hearing, is putting further pressure on the Aussie dollar.

"The big macro trend is for the Aussie to move back lower.

"We might see these little spikes up and down, but any rally like we saw in the last week - it's not built on anything."

Australian bond futures prices were also lower.

At 1200 AEST, the September 10-year bond futures contract was trading at 96.160 (implying a yield of 3.840 per cent), down from 96.245 (3.755 per cent) on Tuesday.

The September three-year bond futures contract was at 97.320 (2.680 per cent), down from 97.380 (2.620 per cent).


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