Aust dollar higher at noon, bonds weaker
15 Dec 2008 12:34 PM
SYDNEY, Dec 15 AAP - The Australian dollar has opened higher after an up-and-down weekend session where the fate of the troubled US car industry dominated market direction.
At 0700 AEDT, the Australian dollar was trading at $US0.6629/37, up from Friday's close of $US0.6568/76.
During the weekend offshore session, the local unit traded between a low of $US0.6492 and a high of $US0.6641.
The Australian dollar fell below $US0.6500 during the early part of Friday night's (AEDT) offshore session, as Asian equity markets all closed lower on news the US Senate had rejected a plan to rescue troubled US automakers General Motors, Ford and Chrysler.
Commonwealth Bank manager of institutional services foreign exchange Tim Kelleher said the US Senate's rejection pushed the Australian dollar lower at the end of Asian trading and at the start of the European trading day.
"It really did come off quite sharply and that carried on into London," Mr Kelleher said from Auckland.
"The market was quite happy to put a bit of pressure on the Australian dollar initially on the negative news."
Tokyo's Nikkei 225 index finished Friday's session down 5.56 per cent.
But the local currency recovered during the US trading session, after the US federal government said it would consider using money set aside for the bailout of Wall Street financial firms to rescue troubled US car markers General Motors, Ford and Chrysler.
US equity markets, which were down more than 200 points during the session, rebounded on the news and climbed out of the red to finish higher, supporting a stronger Australian dollar.
"We just followed equities again," Mr Kelleher said.
While the announcement lifted the Australian dollar back above $US0.6600, Mr Kelleher said the unit remained within its broad trading range of the past couple of months.
He said currency markets would remained focused on any further developments regarding the bailout plan during Monday's local session, with the Australian dollar likely to trade between $US0.6575 and $US0.6700.
"I'd say the Aussie dollar on the day will probably struggle to do too much," Mr Kelleher said.
In terms of local economic data, the Australian Bureau of Statistics (ABS) releases lending finance data for October at 1130 AEDT.
CURRENCY TABLE: Currency snapshot at 0700 AEDT
CURRENCY SPOT PREVIOUS CLOSE
AUD/USD 0.6629-37 0.6568-76
AUD/JPY 60.58-68 58.92-01
AUD/EUR 0.4958-67 0.4935-46
AUD/NZD 1.2128-49 1.2015-46
AUD/GBP 0.4433-43 0.4382-92
EUR/USD 1.3363-69 1.3399-02
USD/JPY 91.37-45 89.71-74
EUR/JPY 122.13-19 119.32-36
(*Closes taken at 1700 AEDT Previous local session)
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At 0900 AEDT, the Reserve Bank of Australia's trade weighted index was at 54.3, up from Friday's close of 53.7.
AAP jtc/
SYDNEY, Dec 15 AAP - The Australian dollar was higher at noon as growing US dollar weakness and positive sentiment from local equity markets helped lift the currency towards $US0.6700.
At 1200 AEDT, the Australian dollar was trading at $US0.6657/61, up from Friday's close of $US0.6568/76.
During the morning, the local unit traded between a low of $US0.6612 and a high of $US0.6694.
The Australian dollar opened stronger at $US0.6629/37 at 0700 AEDT following weekend offshore trading.
The local currency rose after the White House said it would "consider" using money set aside for the rescue of Wall Street financial firms to help Detroit's big three automakers - General Motors, Ford and Chrysler.
The US Senate had earlier failed to come to agreement on a rescue package.
The Australian dollar's climb higher continued at the start of the local trading day, with the currency buoyed by increasing US dollar weakness and a bright start on local equity markets.
ANZ Banking Group senior currency strategist Tony Morriss said the euro-US dollar cross breaking above $US1.34 had helped the local currency.
"There's a weak US dollar story there," Mr Morriss said.
"After the moves that we've seen in recent months maybe there was some scope for the Aussie to rebound."
Mr Morriss said he expected the US dollar to remain under pressure ahead of the Federal Open Market Committee (FOMC) meeting and interest rate decision due on Wednesday morning (AEDT).
"The yields in the US have been falling and the numbers have been awful so going into FOMC, the US dollar is going to be weak," Mr Morriss said.
"There's a lot of economic weakness yet to play out in the US."
Mr Morriss said the Australian dollar could reach $US0.7000 over the next couple of weeks if the euro reached $US1.37.
CURRENCY TABLE: Currency snapshot at 1200 AEDT
CURRENCY SPOT PREVIOUS CLOSE
AUD/USD 0.6657-61 0.6568-76
AUD/JPY 60.50-56 58.92-01
AUD/EUR 0.4949-59 0.4935-46
AUD/NZD 1.2127-43 1.2015-46
AUD/GBP 0.4436-46 0.4382-92
EUR/USD 1.3441-45 1.3399-02
USD/JPY 90.90-93 89.71-74
EUR/JPY 122.20-25 119.32-36
(*Closes taken at 1700 AEDT Previous local session)
At 1200 AEDT, the Reserve Bank of Australia's trade weighted index was at 54.3, up from Friday's close of 53.7.
Meanwhile, the Australian bond market was weaker at noon.
At 1200 AEDT, the yield on the Commonwealth Government March 2019 bond was at 4.485 per cent, up from Friday's close of 4.307 per cent, while the yield on the June 2011 bond was at 3.275 per cent, up from 3.195 per cent.
On the Sydney Futures Exchange, the December 10-year bond futures contract expired at 95.570, down from Friday's close of 95.740, while the December three-year bond futures contract price expired at 96.650, down from 96.755.
At 1200 AEDT, the March 10-year bond futures contract price was at 95.505, down from Friday's close of 95.685, while the March three-year bond futures contract price was at 96.470, down from 96.545.
SECURITY YIELD PREVIOUS CLOSE
CGS 5.25 pct Mar 2019 4.485 4.307
CGS 5.75 pct Jun 2011 3.275 3.195
90-day bank bill rate 4.510 4.390
180-day bank bill rate 3.978 3.932
Sydney Futures Exchange
CONTRACT PRICE PREVIOUS CLOSE
Dec 2008 10-yr bond futures 95.570 95.740
Dec 2008 3-yr bond futures 96.650 96.755
Mar 2009 10-yr bond futures 95.505 95.685
Mar 2009 3-yr bond futures 96.470 96.545
Mar 2009 bill futures 96.900 96.970
Jun 2009 bill futures 97.050 97.100
