Aust dollar higher at noon, bonds mixed
30 Dec 2008 12:36 PM
SYDNEY, Dec 30 AAP - The Australian dollar was higher at noon after the escalation of tensions in the Middle East caused commodities prices to rise and the US dollar to weaken.
At 1200 AEDT, the Australian dollar was trading at $US0.6882/86, up from Monday's close of $US0.6864/68.
During the morning, the local unit moved between $US0.6851 and $US0.6906.
The Australian dollar reached $US0.6968 during offshore trading on Monday night (AEDT) on worries the conflict in the Middle East could possibly impact oil supplies.
The move was not sustained however, as the local currency opened the local session at $US0.6896/00 at 0700 AEDT.
Barclays Capital currency strategist David Forrester said the Australian dollar advanced on higher commodities prices and a weaker US dollar.
"We did see some US dollar selling on the back of concerns that tension in the Middle East will restrict oil supply to the US and actually increase oil prices," Mr Forrester said from Singapore.
Crude oil for February delivery reached $42.20 a barrel during trade on the New York Mercantile Exchange but backpedalled towards the end of the session to settle up $US2.31 at $US40.02.
The price of gold also was higher - gold futures for February delivery rose $US4.10 to $US875.30 an ounce.
Israel continued its rocket attacks on the Gaza Strip overnight, with Israeli defence minister Ehud Barak describing the operation as an "all-out war against Hamas".
The unit traded just below $US0.6900 for most of the morning, in quiet conditions.
Mr Forrester said there was still some risk aversion in the market, "which is seeing the Aussie drift off a little bit and people be a bit cautious about driving cyclical currencies in general higher".
"We do have pretty thin markets at the moment so any moves are exaggerated," he added.
The Australian dollar was expected to move back towards Monday's local close of $US0.6864/68 during afternoon trading, he said.
CURRENCY TABLE: Currency snapshot at 1200 AEDT
CURRENCY SPOT PREVIOUS CLOSE
AUD/USD 0.6882-86 0.6864-68
AUD/JPY 62.39-46 62.12-17
AUD/EUR 0.4889-99 0.4840-49
AUD/NZD 1.1858-86 1.1876-93
AUD/GBP 0.4749-59 0.4668-80
EUR/USD 1.4063-67 1.4165-69
USD/JPY 90.72-75 90.52-55
EUR/JPY 127.56-63 128.23-28
(*Closes taken at 1700 AEDT Previous local session)
At 1200 AEDT, the Reserve Bank of Australia's trade weighted index was at 55.3, which is where it finished yesterday.
Meanwhile, the Australian bond market was mixed at noon.
At 1200 AEDT, the yield on the Commonwealth Government March 2019 bond was 4.003 per cent, up from Monday's close of 3.968 per cent, while the yield on the June 2011 bond was at 3.128 per cent, down from 3.130 per cent.
On the Sydney Futures Exchange, the March 10-year bond futures contract price was 95.995, down from Monday's close of 96.020, while the March three-year bond futures contract price was 96.635, which is where it closed on Monday.
SECURITY YIELD PREVIOUS CLOSE
CGS 5.25 pct Mar 2019 4.003 3.968
CGS 5.75 pct Jun 2011 3.128 3.130
90-day bank bill rate 4.107 4.300
180-day bank bill rate 3.732 3.690
Sydney Futures Exchange
CONTRACT PRICE PREVIOUS CLOSE
Mar 2009 10-yr bond futures 95.995 96.020
Mar 2009 3-yr bond futures 96.635 96.635
Mar 2009 bill futures 96.950 96.910
Jun 2009 bill futures 97.150 97.120
