Monday, 13 April, 2015

$A lower and not expected to recover

The Australian dollar is lower as traders bet the US Federal Reserve will raise its interest rate in June rather than September.

The local currency was worth 76.54 US cents at 1200 AEST on Monday, down from 76.85 US cents on Friday.

The US dollar is enjoying a strong rally, which started last week against most of the major currencies, as recent US economic data was seen to increase the chances of a rate rise by the Fed.

“That’s having an impact on all currencies including the Aussie,” said Stephen Innes, senior trader at OANDA Asia Pacific.

LTG GoldRock director Andrew Barnett said expectations this week’s Chinese and Australian economic numbers will be weak will put the Australian currency under further pressure.

That data includes Australian business and consumer confidence and jobs figures, plus Chinese economic growth and retail spending figures.

“At this stage I’m sort of leaning towards most of these announcements are probably going to be on the negative side rather than the positive side,” Mr Barnett said.

“Those things coming, coupled with (Australian) interest rates going lower in May, by the end of the week we are going to see the Aussie back lower, rather than higher.”

Meanwhile, the Australian bond market was firmer at noon.

The June 2015 10-year bond futures contract was trading at 97.650 (implying a yield of 2.350 per cent), up from 97.635 (2.375 per cent) on Friday.

The June 2015 three-year bond futures contract was at 98.280 (1.720 per cent), up from 98.260 (1.740 per cent).

KEY MOVEMENTS

One Australian dollar buys:

* 76.54 US cents, from 76.85 cents on Friday

* 92.03 Japanese yen, from 92.64 yen

* 72.18 euro cents, from 72.18 euro cents

* 101.17 New Zealand cents, from 101.75 NZ cents

* 52.31 British pence, from 52.30 pence

Government bond and bank bill yields:

* CGS 4.75pct July 2017, 1.759%, from 1.770% on Friday

* CGS 2.75pct April 2024, 2.300%, from 2.312%

(*Currency closes taken at 1700 AEST previous local session, bond market closes taken at 1630 AEST previous local session)

Source: IRESS