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$A rises on strong retail spending

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Published on: Thursday, March 06, 2014

by AAP

The Australian dollar has risen above 90 US cents on stronger than expected retail spending and export figures.

At 1200 AEDT on Thursday, the local unit was trading at 90.24 US cents, up from 89.59 cents on Wednesday.

The Aussie dollar rose by more than a third of a US cent after retail and international trade figures, released at 1130 AEDT, beat expectations, St George Bank chief economist Besa Deda said.

"It's largely been boosted by the strong retail data which shows low interest rates are having an effect on the economy," she said.

"This increases the chance of an interest rate hike later in the year which will likely boost demand for the Aussie."

She said the local currency was expected to hold onto its gains throughout the local trading session.

Retail spending jumped 1.2 per cent in January, according to the Australian Bureau of Statistics, three times the 0.4 per cent rise economists had expected.

International trade figures showed a trade surplus of $1.433 billion in January, following a surplus of $591 million in December, which was revised up from a surplus of $468 million.

Economists had expected a deficit of $100 million in January.

The Aussie dollar was already performing solidly on the back of positive gross domestic product figures released on Wednesday.

The series of strong local data have reduced demand for safe-haven assets.

Meanwhile, the Australian three-year bond futures prices are lower while the 10-year bond futures prices are flat.

At 1200 AEDT on Thursday, the March 2014 10-year bond futures contract was trading at 95.995 (implying a yield of 4.005 per cent), unchanged from Wednesday.

The March 2014 three-year bond futures contract was at 97.030 (2.970 per cent), down from 97.070 (2.930 per cent).


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