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$A still higher after weak US retail data

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Published on: Friday, February 14, 2014

by AAP

The Australian dollar rose past 90 US cents in morning trade, getting a boost from weak US economic data.

At 1200 AEDT on Friday, the local unit was trading at 89.92 US cents, up from 89.34 cents on Thursday.

During the morning, it traded between 89.67 US cents and 90.09 cents.

Official figures, out during the overnight session showed that US retail spending fell 0.4 per cent in January, but was up 4.2 per cent in the 12 months to January, the weakest annual gain in four years.

Westpac senior currency strategist Sean Callow said the Australian dollar benefited from some weakness in the greenback after the retail figures were released.

"A US dollar slide on dismal retail sales data was the main movement in the London and New York sessions," Mr Callow said.

"The Australian dollar recaptured some of its ground lost on the poor local jobs data on Thursday."

On Thursday morning, the Australian dollar dipped to its intraday low after Reserve Bank of Australia assistant governor of economics Christopher Kent gave a speech on the resources boom and the Australian dollar.

"Naturally much of the speech was big picture with plenty of caveats on the uncertainty of foreign exchange movements but there was some selling on Kent's line that a correction in the exchange rate might be in prospect," Mr Callow said.

"Overall the impression remains that the RBA is a lot less concerned about the Australian dollar than it was throughout 2013."

Meanwhile, the Australian bond market was slightly firmer.

At 1200 AEDT on Friday, the March 2014 10-year bond futures contract was trading at 95.885 (implying a yield of 4.115 per cent), up from 95.875 (4.125 per cent) on Thursday.

The March 2014 three-year bond futures contract was at 96.980 (3.020 per cent), level with its previous local close.


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