Although the Australian Dollar continued to trade in the region of a more than four-month low against the US Dollar, it was able to gain on its New Zealand counterpart after data for the smaller South Pacific Nation failed to live up to expectations.
The Australian Dollar exchange rate was trading in the region of 1.0183 against the US Dollar as of 11:53 am GMT
The political palaver in Italy continues to raise concerns regarding the economic stability of the Eurozone, and with the current issues in the 17-nation currency bloc slightly dampening investor risk-appetite the Australian Dollar has held on to recent losses.
As a Westpac Banking Corp Strategist stated: ‘Italy’s government will be uncertain and fragile over the next few weeks and commitments to reform will also be fragile. [This may be] the catalyst to clean out extreme long positioning in the New Zealand and Australian Dollars. You may well see further fallout.’
The ‘Aussie’ was also prevented from advancing against the majority of its most traded peers by worse-than-forecast construction work data. Although economists expected a 1.5 per cent advance in the value of total construction in the final quarter of last year it actually fell by 0.1 per cent.
However, negative news from New Zealand did allow the Australian Dollar to climb on one of its major currency rivals.
New Zealand’s annual trade deficit widened to 1.3 billion NZ Dollars last year, despite economists expecting a gap of 897 NZ Dollars.
Following the news the ‘Kiwi’ broadly softened, losing ground against several of its peers – including the ‘Aussie’.
However, the ‘Kiwi’ recouped much of its initial losses before the close of trade and given the recent influx of positive data for New Zealand this trade deficit figure is unlikely to wear on the currency for long.
As Westpac strategist Imre Speizer noted: ‘The trade figured weighed on the currency for only a few minutes, and rightly so. We expect to see a bounce back in February, so there’s nothing sinister going on in terms of trade balance deteriorating.’
The major pieces of down-under data to watch out for this week include Thursday’s Australian New Home Sales, Private Sector Credit, Average Weekly Wage and AiG Performance of Manufacturing Index figures, plus Friday’s RBA Commodity Price Index. Industry experts have predicted that capital spending gained 1 per cent in the fourth quarter of 2012, after rising 2.8 per cent in the third.
Any developments regarding the political situation in Europe, or any worse-than-expected Chinese data, could trigger ‘Aussie’ movement.
Current AUD Exchange Rates
The Australian Dollar to Euro exchange rate is trading at 0.7775
The Australian Dollar to US Dollar (AUD/USD) exchange rate is trading at 1.0183
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is trading at 0.6732
The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate is trading at 1.2372
The Australian Dollar to Canadian Dollar (AUD/CAD) exchange rate is trading at 1.0457
The Australian Dollar to Japanese Yen (AUD/JPY) exchange rate is trading at 93.3547
These exchange rates were correct as of 11:53 am GMT
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