Forex: AUD/USD – Australia’s dollar strengthens ahead of American opening

on Jul 9, 2013
Listen Tuesday July 9th: The Australian dollar has continued its ascent for a second consecutive day, rising by more than one percent against the USD in European trading so far today, to be at 0.9198.

The pair has now regained the ground lost when news of Chinese inflation and Australian business conditions pushed the AUD to 0.9083. But in bigger picture terms, the Australian dollar has tumbled by almost 10 percent in the past three months, making it the worst performer over that period amongst 10 developed-nation currencies.

Earlier today a leading measure of business conditions in ‘the Lucky Country’ came out with a fall to its lowest level since May 2009. The National Australia Bank survey of Australian business conditions for June reported a drop to minus 8 points from the prior period’s minus 4.

Traders are hedging their bets on whether the Reserve Bank of Australia will cut interest rates at its next official meeting on August 6th, with some projections for November. Australian economic performance is heavily reliant on the country’s massive trade with China and recently lowered outlooks for Chinese GDP growth in the second quarter are impacting badly on Australian confidence indicators.

Earlier today, the PRC’s National Bureau of Statistics reported that consumer price inflation rose by 2.7 percent in June y/y from May’s reading of 2.1 percent. Producer prices fell by 2.7 percent last month following a 2.9 percent decline in May. Analysts had been expecting CPI growth of 2.5 percent and factory prices to fall by 2.7 percent. Month-on-month, the June CPI was 0.2 percent down on May. Expectations had been for an unchanged reading.
In New Zealand, business confidence rose in the second quarter: the NZIER index climbed to 32 from the prior quarter’s reading of 23, to log the highest level since September 2009.