Aussie Soars To New Multi-Year Highs Against Dollar And Loonie [AUD/USD]
4/23/2008 12:20:28 PM During New York trading on Wednesday, the Australian dollar soared to a new multi-year high against the greenback and loonie. The Aussie also strengthened to multi-week highs against the euro and yen.
On the economic front, Australia`s March quarter annual rate of inflation soared above 4% for the first time in almost seven years, increasing the risk of another interest rate hike in the coming months.
The Reserve Bank of Australia`s underlying measures of inflation also jumped above 4%, well above the central bank`s 2 to 3% target. The central bank had already predicted a CPI rate of about 4%, but had expected underlying inflation to be just below this level.
The Australian Bureau of Statistics said today that the consumer price index rose 1.3% from the previous quarter and increased 4.2% from a year earlier, beating market forecast of 1.1% and 4.0% growth, respectively. Surging commodity and food prices and rising wages pushed annual inflation above central bank`s target.
The aussie rose to a new multi-year high of 0.9545 in early New York. Thereafter, the aussie eased against the greenback and touched a low of 0.9457 versus the dollar by about 10:15 am ET.
The Aussie edged up to a 5-week high against the euro. At about 6:00 am ET, the aussie reached to 1.6736 against the euro, compared to yesterday`s close of 1.6928.
France`s consumer spending of manufactured goods declined 1.7% month-on-month in March, faster than 0.3% fall expected, the statistical office INSEE said Wednesday. In February, consumer spending was up 1.3%, revised up from 1.2% reported earlier.
Euro zone industrial new orders grew 0.6% month-on-month in February, the Eurostat announced Wednesday. Economists had expected a decline of 0.4%. However, the new order growth eased from a revised 2.2% rise registered in January.
Against the loonie, the Australian dollar soared to a new multi-year high of 0.9698 at about 8:50 am ET. Currently, the aussie-loonie pair is worth 0.9667.
Wednesday morning, Statistics Canada released its report on Canadian retail sales in the month of February showing that the retail sales fell 0.7 % in February following a 1.4 % increase in January. This marked the first decrease in sales in five months. The decrease came as a surprise to economists, who had been expecting a modest increase of about 0.3 %.
Yesterday, the Bank of Canada lowered its key overnight lending rate by 50 basis points to 3 percent, as expected. This marked the bank`s second consecutive 50 basis point rate cut.
In its accompanying statement, the bank said that global economic growth has weakened due to the sharp slowdown in the U.S. economy and ongoing dislocations in global financial markets.
Additionally, the bank said it expects the Canadian economy will grow by 1.4 % in 2008 before accelerating to 2.4 % in 2009 and 3.3 percent in 2010.
The Australian dollar also gained strength against the Japanese currency, rising to 98.44 yen in early New York from 97.34 hit late yesterday in New York. This set an 8-week high for the aussie-yen pair. As of now, the aussie-yen pair is worth 98.33.
The Ministry of Finance said today that Japan`s merchandise trade surplus decreased by 30.2% on year to 1.119 trillion yen in March. Market had expected a 15.3% drop in trade surplus. Copyright © 2007 RTTNews.com. All Rights Reserved.